BAHAMAS Law and Practice Contributed by: Dwayne Whylly, Kamala Richardson-Deal and Nastassia Rigby-Rodriguez, Glinton Sweeting O’Brien
Glinton Sweeting O’Brien 303 Shirley Street Suite 205 Albany Financial Center New Providence The Bahamas
Tel: +242 328 3500 Fax: +242 328 8008 Email: info@gsolegal.com Web: www.gsolegal.com
1. Fintech Market 1.1 Evolution of the Fintech Market There have been minimal changes in the fintech mar - ket in The Bahamas over the past 12 months. The Digital Assets and Registered Exchanges Act of The Bahamas, the primary legislation governing digital asset businesses and registered exchanges, the Digi - tal Assets and Registered Exchanges Act, 2020 (the “DARE Act 2020”) was repealed and replaced by the Digital Assets and Registered Exchanges Act, 2024 (the “DARE Act 2024”), subject to transitional rules (eg, 90 days for existing registrants to apply for regis - tration and the carry. The DARE Act 2024 introduced significant changes to the regulatory framework governing digital asset businesses and registered exchanges operating in or from within The Bahamas (DABs), including the following. • It enumerates a wider set of activities now requiring registration, including: (a) operating a digital asset exchange; (b) exchanging digital assets (for fiat and other digital assets);
(l) DLT node services; (m) anonymity enhancing services; (n) digital asset derivative services; and (o) staking services. • It reframes and strengthens the token offering regime: (a) it introduces a dedicated stablecoin regime, banning algorithmic mechanisms that adjust supply to maintain value, mandating full reserve backing, segregation of reserves, quarterly proof of reserves, redemption policies provid - ing 1:1 redemption (net ordinary disclosed fees); and empowering the Securities Commis - sion of The Bahamas (the “Securities Commis - sion”) to halt/delist stablecoins; (b) it requires an offering memorandum signed by founders/board and imposes a legal opinion on token classification; (c) it retains purchaser rights, including rescission/ damages and a 72-hour withdrawal right with two-day refunds; and (d) it expressly prohibits the offering of privacy tokens in or from The Bahamas and clarifies obligations for services involving them. • It introduces stronger, more granular requirements for registered exchanges, including the require - ments to: (a) maintain assets in The Bahamas equal to at least twelve months of operating expenses; (b) maintain off chain transaction records; and (c) make near real-time price/volume/time data available to clients. • It introduces client asset safeguarding, segrega - tion, written custody agreements, and periodic
(c) payment services; (d) executing orders; (e) issuing stablecoins; (f) placing digital assets; (g) reception and transmission of orders; (h) transfer services; (i) custody; (j) advice; (k) management;
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