Bahamas’ DARE pays off



• Commission chief hails ‘huge vote of confidence’ in Act

• Helps attract the world’s third largest crypto exchange 

• Regulator now working on accompanying rules, policy


Tribune Business Editor


The Securities Commission’s executive director yesterday said its legislative DARE has received “a huge vote of confidence” through attracting a major crypto currency exchange to The Bahamas.

Christina Rolle told Tribune Business that FTX Trading’s decision to establish a subsidiary with physical presence in this nation signalled that The Bahamas “went in the right direction” by passing the Digital Assets and Registered Exchanges (DARE) Act to fully regulate this fast-evolving and moving sector.

Pledging that the capital markets regulator is “keeping on top” of global developments relating to crypto currency and virtual assets, she added that more DARE-related applications for licences and registration are “in the pipeline” although their number and identities were not disclosed.

And Ms Rolle also revealed the Securities Commission is working on anti-money laundering/counter-terror financing/proliferation financing rules for the virtual asset space, as well as policies “addressing certain operational matters” in addition to when a virtual asset - or token - crosses over to become a physical security.

She explained that the Securities Commission was opting for rules, rather than regulations, as the latter were “too prescriptive” and could stunt growth and innovation in the digital niche where The Bahamas has a chance to become a market leader and regain some of the ground it has lost in financial services over the past 20 years.

“It’s a huge vote of confidence for the jurisdiction, and what it signals is that you have a big player like this [FTX Trading] that is really looking for a jurisdiction that has clearly defined the scope of its regulation, and that is what DARE provides,” Ms Rolle told this newspaper. “I think this is certainly a possible signal that we went in the right direction.

“It’s a huge vote of confidence, and a signal that this is the direction other jurisdictions are likely to go in.... I would imagine that with such a big player, which has planted its flag in The Bahamas as they describe it, they will attract other players because they will be seen as a leader in the space. We know other players are looking intently at the jurisdiction, so we think this will be a good opportunity for The Bahamas.”

The Securities Commission chief said FTX Trading and its Bahamian subsidiary, FTX Digital Markets, had been seeking “a space in which they can operate in a regulated way” and this was what The Bahamas can provide via the DARE Act that was passed under the former Minnis administration.

FTX Trading bills itself as the world’s third-largest crypto currency exchange, and projects that it will enjoy close to $1bn in revenues this year. Its trading volume is pegged at $4.3bn according to Coinmarketcap.com

Nevertheless, sounding some caution when it came to The Bahamas’ entrance into digital assets, Ms Rolle said: “It’s early days, and we don’t know yet what kind of push back there will be from the international community.

“We do know, in so far as there is international guidance with respect to digital assets, we’re keeping on top of these things so we’re very likely to come out soon with anti-money laundering/counter-terror financing/proliferation financing rules with respect to DARE very soon. We’ll come out with those with respect to DARE to satisfy the FATF requirement./

“We’re also likely to come out soon with a policy with respect to DARE that will address certain operational matters, and how the Commission views a token and when the token processes over to become a security.”

The Securities Commission chief further explained: “We have rules; we don’t have regulations. We were deliberate in not setting regulations at the moment. They tend to be very prescriptive, and we want the breathing room to observe the space without being prescriptive.

“The policy and rules allow us to address certain matters at the moment, and the Act provides the regulatory framework that allows us to regulate in a responsible and legal way without being overly prescriptive.”

Ms Rolle pledged that the Securities Commission will stay abreast of international regulatory developments involving digital assets, adding: “It’s up to us to keep pace with the regulatory pace, and keep pace with developments in the area. We’ve been keeping up so far.

“It’s just a matter of us making sure we’re ahead enough so we can ensure we see where it’s going. It’s matter of staying on top of things and constantly talking to players in the market, making sure we’re constantly involved in the regulatory space internationally.”

Ms Rolle said FTX Trading is aiming to provide a further “leg up for the jurisdiction” by hiring and training Bahamians, although she was unable to say how many. She added, though, that “building capacity” is critical to the Bahamian financial services industry’s sustainability.

“What’s really good is that we have a first mover that is not only a big player in the crypto world, but they are also committed to regulation, committed to compliance, and want to be physically present in the jurisdiction and community,” she added.

“They definitely tick all the boxes in that respect, and hopefully this pans out to what we think it will be - a big entity who will be a major player in The Bahamas.”

Sam Bankman-Fried, FTX’s chief executive and founder, said of The Bahamas move: “With this expansion through the DARE Act we are further committing to providing all our clients with a safe, trustworthy and compliant exchange.

“We are committed to maintaining a close working relationship with local regulators so that together we can navigate putting a comprehensive regulatory framework in place to help promote the growth of this nascent asset class.”

FTX Digital Markets said it expects to establish a substantial presence in The Bahamas, with plans to hire Bahamians to serve in the areas of finance, marketing and software development.

Ryan Salame, chief executive of FTX Digital Markets, the Bahamian subsidiary, added: “I’m excited to plant the flag for FTX in The Bahamas. The relationship we have fostered with local regulators, culminating with us being authorised under the framework offered through the DARE Act, gives me confidence that we’ll be able to work closely with regulators to make sure our offerings are compliant in multiple jurisdictions.”

Allyson Maynard-Gibson, former attorney general and minister for financial services and investments, was FTX Trading’s legal adviser


DWW 2 years, 9 months ago

crypto is over soon. bit of a waste of time no?

ThisIsOurs 2 years, 9 months ago

"China will gradually start shutting down crypto mining operations, and no new mining projects will be permitted, the National Development and Reform Commission said in a separate statement....The computers needed for bitcoin mining eat up a ton of computing power and electricity, raising concerns about the cost to the environment." -cnn.com

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