The Bahamas, in 2020 dared to make themselves the location for cryptocurrency transactions through its Digital Assets and Registered Exchanges (DARE) act in 2020, welcoming cryptocurrency companies such as FTX to its shores to do business in the digital currency.
But coming out of the company’s collapse in November last year, it would seem to some that it took the Bahamas down with it, with some questioning the financial reputation and the viability of its policies on cryptocurrency in the small island with big ambitions.
However, Bahamian Prime Minister Philip “Brave” Davis – speaking at the TT Coalition Service Industries' "Doing business with the world series" last Friday at the Hyatt Regency, Port of Spain – said it was because of the regulations that the country was able to respond to the implosion of FTX.
Doubling down, Davis said the policies on digital currency is continuing to evolve with new innovations coming up.
He told reporters that the experience that the Bahamas had with FTX has not changed, in fact, he believes that more and better regulations would help cryptocurrency evolve.
DAREing to act on cryptocurrency
The DARE act came into effect in the Bahamas on December 14, 2020. It created a legal definition for digital assets and designed a regulatory framework for digital asset business and activities permitted in the Bahamas.
The act requires issues to comply with several obligations including providing an offering memorandum which will detail the objectives, risks and terms of investments in cryptocurrency; continuing disclosure on the status of investments and a maintenance of the purchasers’ rights to rescission or damages and withdrawal.
The DARE act gave digital asset providers, especially ones based outside the Bahamas, the option of putting its name on a registry.
A commission will keep a register of the initial token offerings containing special information.
Other aspects of policies in the act include standards for addressing conflicts of interest or connected third party relationships; transactions as a part of a reward program; definitions for digital assets used within a video game; and restrictions on proof of work or mining of digital assets in or from within the Bahamas.
Davis spoke in defence of the regulatory framework established by the act and said the DARE act was able to help the Bahamian government protect investors even as FTX crashed.
“The FTX experience has not changed our view of the regulatory regime in the Bahamas at all,” he said, responding to questions at the Hyatt. “We were able to step in and get control of the assets because of the regulations.”
[caption id="attachment_1030782" align="alignnone" width="800"] The Bahamas Prime Minister Phillip Davis.(Photo courtesy Office of the Prime Minister of Bahamas website) -[/caption]
He explained that although the coins – known as FTTs – did not have the same value, the coins were still there.
He advised those with coins to hold on to them to see how the market behaves.
“Sometimes you have t
