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Bahamas Seeks to Tighten Its Crypto Laws Following FTX Collapse
The crypto exchange's headquarters was in the island nation.
Updated Apr 26, 2023, 11:29 p.m. Published Apr 26, 2023, 10:55 a.m.
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The Bahamas is seeking to tighten its crypto laws in the wake of the collapse of FTX, the crypto exchange whose headquarters was in the Caribbean nation, according to a statement from the Securities Commission of the Bahamas Tuesday.
The new bill includes measures on stablecoins, proof-of-work mining and staking, and it could become “among the most advanced pieces of digital-asset legislation in the world,” Christina Rolle, executive director of the Bahamas' regulator, said in the statement.
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The Bahamas, which passed crypto legislation formally called the Digital Assets and Registered Exchanges Act in 2020, was home to Sam Bankman-Fried and his crypto exchange FTX, which fell apart last November.
Since then, Bankman-Fried has been accused of siphoning off corporate funds to spend on luxury villas in the Bahamas. He pleaded not guilty to fraud charges brought by the U.S. Department of Justice. FTX’s new management has blasted poor governance under his tenure, and is also involved in a protracted legal dispute with the Bahamas over jurisdiction.
Under the new bill, “operators of a digital-asset exchange must ensure the systems and controls used in its activities are adequate and appropriate for the scale and nature of its business,” the Securities Commission of the Bahamas said.
It will also bring in a “new and comprehensive regulatory framework for stablecoins” whose value is pegged to the U.S. dollar or another stable asset, after the collapse of Terra's terraUSD stablecoin last year. The bill also covers crypto services such as advice, derivatives and staking and includes oversight of non-fungible tokens.
Read more: FTX’s Bankruptcy Lawyers: ‘The Dumpster Fire Is Out’
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