In a move to make amends for the scourge of the FTX collapse, the Bahamas’ crypto regulator has proposed reviewing its regulatory rules for digital assets. According to a statement to the press by the Securities Commission of the Bahamas on Tuesday, the regulator has opened a consultation to tighten its regulatory laws further.
The review of its already existing regulations, termed the Digital Assets and Registered Exchanges (DARE) Bill, would revisit critical issues such as what digital asset firms should be regarded as, crypto staking, and standards for stablecoin issuers.
DARE Addresses Crypto Exchange Control
Bahamas passed the DARE bill into law in 2020; however, the FTX capitulation stirred concerns over the efficiency of the regulation in place. The new management of the defunct Bahamas-based exchange has attacked the island’s government on multiple occasions for its part in the fall of FTX.
The new CEO, John Ray, stated in an official lawsuit that the Bahamas government illicitly obtained assets belonging to FTX that should be in the exchange’s custody, which the Bahamas attorney general called a “misrepresentation” of its action.
According to the new law, “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 new law addressed the rascality in the behavioral management pattern of indicted former FTX boss Sam Bankman-Fried. The arrested founder misappropriated the exchange’s funds, spending them on political campaigns and influence soliciting in Washington, DC.
New Stablecoin Checks
The amended DARE law would also include a more comprehensive regulatory framework for stablecoins. The Bahamas would also ban issuing algorithmic stablecoins after the Terra collapse prompted a loss of faith in these types of USD-pegged coins.
As stated by the SCB, the new amendments would rank among the world’s most advanced pieces of digital asset legislation. The consultation will remain open until May 31, after which the Bahamas will pass the amendments into law.
