The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

THE SECURITIES Commission of The Bahamas has imposed more than $221.7m in administrative penalties over the past two years as it shifts from a predominantly remediation-led approach to a more aggressive financial enforcement regime, while reporting a sharp decline in AML/CFT/CPF deficiencies found during examinations.

The Commission’s AML/CFT/CPF Activity Report for 2021–2025 said it concluded 68 administrative penalties in 2024 and 2025, including 43 in 2024 and 25 in 2025, after imposing no administrative penalties during the first three years of the review period.

Penalties imposed totalled $221.57m in 2024 and $142,650 in 2025, with the vast majority of the 2024 figure tied to a single $221.1m settlement involving the joint official liquidators of FTX.

The Commission said the move to administrative penalties represented a deliberate progression from remediation-led supervision to an active penalty regime, while stressing that remediation continues independently of enforcement action.

“From 2024, with the quantification methodology and settlement framework fully operational, the Commission moved decisively to administrative penalties,” the report said.

The enforcement figures come as the regulator points to evidence that its increased supervisory activity is also producing fewer compliance deficiencies across the regulated population.

The number of categorised AML/CFT/CPF findings per examination fell from a peak of 7.7 in 2022 to 5.4 in 2023, 4.4 in 2024 and 3.3 in 2025.

That decline occurred even as the Commission substantially increased the number of examinations it completed, from 31 in 2021 to 76 in 2025.

Across the five-year period, the Commission concluded 240 examinations covering 240 distinct licensees and registrants. Of those, 172 were routine examinations, 64 were thematic and four were for-cause examinations.

The Commission said the falling number of findings per examination indicated strengthening compliance, particularly because the regulator was increasing the intensity of its examinations.

“Fewer deficiencies are being found per examination even as examinations look harder,” the report said.

The regulator also reported a 100 percent remediation rate for AML/CFT/CPF findings identified between 2021 and 2024, with all 814 findings identified over those four years fully remediated and none escalated to enforcement for non-remediation.

Findings identified in 2025 remain within their prescribed remediation timelines.

Despite the overall improvement, sanctions screening emerged as the most frequently identified compliance weakness during the period.

Targeted financial sanctions and sanctions-screening breaches rose from 81 in 2022 to 74 in 2023, 104 in 2024 and 105 in 2025.

The Commission said sanctions screening was the most frequently identified category across the period, reflecting the intensity with which those obligations are examined.

Other recurring deficiencies included customer identification and verification, suspicious transaction reporting obligations, risk assessments and risk ratings, training, ongoing monitoring, and policies and procedures.

At the same time, suspicious transaction reporting by the Commission’s supervised population reached a five-year high of 490 reports in 2025, up from 280 in 2024 and 68 in 2023.

Securities industry firms accounted for 280 of the 2025 reports, while digital asset registrants accounted for another 206.

The report cautioned that the 2022 spike to 426 reports was heavily event-driven, with 330 reports relating to the collapse of a single digital asset exchange.

The Commission said the more recent increase in reporting reflects both the expansion of the supervised digital asset population and intensified supervisory attention to reporting obligations.

The regulator’s heightened enforcement activity comes alongside tighter controls over who can enter the regulated market.

Between 2021 and 2025, the Commission concluded more than 2,600 authorisation decisions across its four regulatory regimes, approving applications both outright and subject to conditions.

Twenty applications were refused during the period, 19 of them on fit-and-proper grounds.

The Commission said some refusal cases involved beneficial ownership deficiencies as well as sanctions or adverse-media screening concerns identified through its due diligence process.

The report said the figures demonstrate that authorisation is operating as a genuine control on entry to the market, rather than simply an administrative approval process.

The Commission also handled 399 due diligence requests from and to domestic and foreign counterparts over the five-year period, including 23 involving virtual asset service providers.

The regulator said its enforcement framework is now set to become even more stringent in 2026, when financial penalties for AML/CFT/CPF breaches will be assessed on an extrapolated basis where sample-based examination testing identifies deficiencies across a licensee’s client population.

The approach is intended to strengthen deterrence against recurring deficiencies by applying examination results across the wider client population rather than limiting penalties to the individual breaches identified in a sample.

The Commission said its 2026 supervisory programme will also place greater emphasis on higher-risk entities, digital asset registrants, self-risk assessments, know-your-customer controls, politically exposed persons, reporting obligations and ongoing monitoring.