The Securities Commission of the Bahamas is currently accepting public comments regarding its proposed rules for regulating the local cryptocurrency ecosystem, with one eye on attracting industry participants to set up in the region.
The proposal compiled in a new bill titled “Digital Asset and Regulated Exchanges (DARE)” covers nearly every aspect of the cryptocurrency space including, initial coin offerings, exchanges, investors and virtually everyone participating in the industry.
A consultation period for the proposed bill issued on April 2, is currently ongoing and will end on May 28, even though there are rumors about the regulators extending the deadline in a bid to get more comments.
Overview of Proposed Crypto Rules in the Bahamas
Although the proposed Bahamas Digital Asset and Regulated Exchanges Bill is a more than 30-page document, it could be summarised into the following requirements:
The Securities Commission of the Bahamas will administer the bill and serve as a watchdog for the emerging industry.
Projects seeking to conduct a token issuance will consult the Commission and submit relevant information (offering memorandum) regarding their proposed business. Upon reviewing and approving the application, the Commission will grant a license to the project.
A token sponsor which should usually be an attorney will sign the offering memorandum which must include any relevant information that can negatively affect the interest of potential investors. Failure to provide this information at the onset will attract a fine of up to 10,000 Bahamian Dollars.
The projects must also provide adequate insurance cover for its products and services while also implement the necessary anti-money laundering and counter-terrorism financing procedures.
Failure to abide by the proposed rules will result in a $500,000 fine with the possibility of a five-ten year jail term.
Accredited and non-accredited investors can take part in token offerings.
Following the end of the public consultation period on May 28 or later, the regulators are eyeing the passing of the proposed rules into law sometime in the autumn.