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The Securities Commission of The Bahamas (SCB) has proposed a new framework to regulate the issuance and sale of digital tokens to lure blockchain businesses and crypto investments to the island nation.
“The SCB has been working in close consultation with the industry on the development of this Bill, which we anticipate will be the first piece of a suite of legislation that will establish the regulatory framework for crypto assets in The Bahamas,” Robert Lotmore, SCB Chairman, said.
The draft, entitled “Digital Assets and Registered Exchanges Bill 2019,” seeks to regulate token offerings that are not deemed securities. It includes all areas related to cryptocurrency, including initial coin offerings (ICOs), investors, exchanges, and other stakeholders related to the industry.
Also known as the DARE bill, it extensively lays out a procedure for registering such offerings and highlights the importance of informing authorities and the investors about the new token sale.
The 30-page long document wants crypto projects to consult the Commission and comply with all the required data (offering memorandum) about their proposed business. The documents need to be thoroughly approved and reviewed first before the SCB grants a license to the project.
The offering memorandum should disclose all the relevant information that could negatively affect the interest of potential investors. It should be signed by the token sponsor, who is a counsel or attorney at law. The business will be subject to an administrative penalty of up to $10,000 if it fails to divulge the information.
The business should also adhere to established anti-money laundering and counter-terrorism financing laws, protect clients’ personal information, and prevent data breaches that will jeopardize the crypto-assets of clients.
“Over the last year, the number of queries the jurisdiction has received from entrepreneurs interested in venturing into this form of capital raising has mandated that the jurisdiction ensure legislative and regulatory parameters are in place to address how operators conduct themselves and how token issues come to market,” Christina Rolle, SCB Executive Director, said.
The draft was submitted for public consultations on March 27, and prior to proceeding to the next phase, the regulatory authorities will listen to the public’s views and opinions until May 28.
But aside from regulating token issuances, the proposed regulations will also look into the registration and control of crypto exchanges and other crypto businesses including custodians and wallet services.
“The legislation’s requirements for crypto exchanges are applicable to not only fiat-to-crypto exchanges but also crypto-to-crypto exchanges as well as both centralised and decentralised exchanges,” the draft stated.
The Bahamas joins a long and growing list of nations that are considering or actively develop cryptocurrencies, such as Ecuador, China, Senegal, and Singapore, News BTC reported.
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