Bahamas has taken a decisive regulatory step towards strengthening the position of cryptocurrencies in the country. The region is looking to attract crypto investments and new businesses, which is why the regulatory framework that it is setting up needs to be conducive to the growth of these industries.
This progressive proposal has been presented in the form of a new bill titled “Digital Asset and Regulated Exchanges (DARE)”. The bill includes all the aspects related to cryptocurrency, which include Initial Coin Offerings (ICO), investors, exchanges, and all other stakeholders related to the industry.
Since April 2, a consultation period has begun, discussing the bill. It is scheduled to end on May 28. The Securities Commission of the Bahamas will oversee the execution of the bill. It will also serve as a watchdog for the emerging industry.
It is a 30-page long document so let’s break down the crypto regulations for you.
To begin with, the crypto projects seeking legitimization in the region, and especially looking to conduct a token issuance, will need to consult the Commission and submit all the required data (offering memorandum) regarding their proposed business.
Those documents then require a thorough review and approval before the process can progress any further. Once approved, the Commission shall grant a license to the project.
The memorandum submitted for approval should include any relevant information that could be detrimental to the interest of potential investors. It needs to be signed by the token sponsor, which should usually be an attorney. If this information is not provided beforehand, then the business will be fined up to 10,000 Bahamian Dollars.
The projects must also offer appropriate insurance cover for its products and services, and implement the necessary anti-money laundering and counter-terrorism financing procedures. If not obeyed, it can attract a $500,000 fine with the possibility of a five-ten year jail term.
The token offerings can accept the participation of both accredited and non-accredited investors. Once the consulations are over, the bill will be passed into a law.