Authorities in the Bahamas are working on drafting and implementing improved laws to govern crypto businesses in the country.
The move comes months after FTX, a major crypto exchange domiciled in the Bahamas, collapsed and wiped out tens of millions in investments.
FTX’s crash became a lightning rod for regulators who favor regulations that boot out crypto from the broader financial system.
Bahamas regulators are in the process of redrafting crypto regulations to impose stricter policies and protect investors in the aftermath of FTX’s crash, the crypto exchange founded by Sam Bankman-Fried.
In 2020, the country unveiled its Digital Assets and Registered Exchanges or DARE regulation to promote digital innovation and encourage crypto businesses to set up shop locally.
These regulations were revisited after SBF’s FTX crashed last November and incinerated hundreds of millions of investor funds. According to a consultation paper released on Tuesday, the new law would bring in a new and comprehensive regulatory framework for overseeing stablecoin, staking services, and mining businesses.
Also, operators of a digital asset exchange must ensure the systems used in its activities are appropriate for the scale of its business under the new proposed laws.
Executive director of the Securities Commission of the Bahamas (SCB), Christina Rolle, said the bill would be “among the most advanced pieces of digital asset legislation in the world,” if it passes.
Bahamas On Alert After FTX
The collapse of Bahamas-based crypto exchange FTX has seemingly sparked concern and has galvanized the Bahamas to tighten their crypto laws. Charges from U.S. authorities allege that former FTX CEO Sam Bankman-Fried along with other executives defrauded users, and investors and violated U.S. campaign donation policies.
After filing for bankruptcy in November, Bankman-Fried was arrested in December and then extradited to the U.S. for criminal prosecution.
The FTX collapse is said to be one of the biggest financial frauds in American history. At a press conference in Manhattan, the US attorney for the southern district of new york, Damian Williams, alleged that the former chief executive and others stole billions of dollars from the company’s customers to make personal investments and to finance expenses and debts of his private trading firm, Alameda Research.
SBF could face a lifetime behind bars if found guilty on charges from the 13-count indictment levied by federal prosecutors. Bankman-Fried has notably pleaded “Not guilty” to the charges.