In a significant regulatory shift, the Bahamas Parliament, home to the now-defunct cryptocurrency exchange FTX, has enacted a new crypto law. The Securities Commission of The Bahamas announced the passage of the Digital Assets and Registered Exchanges Act, 2024, or DARE 2024, on Tuesday.

This legislative development follows the tumultuous collapse of FTX in November 2022, which occurred just over a year after the nation’s Prime Minister, Philip Davis, ceremonially opened the FTX office alongside its founder, Sam Bankman-Fried.

“Building upon the foundation laid by the DARE Act, 2020, the new legislation introduces comprehensive reforms designed to address the evolving landscape of digital assets and cryptocurrency markets,” the regulator stated.

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DARE 2024 encompasses a broader spectrum of digital asset activities, extending to advisory and management services, digital asset derivatives, and staking services. The law mandates that digital asset exchanges comply with enhanced investor and consumer protection standards, including rigorous systems and controls requirements.

The legislation also imposes new disclosure and financial reporting obligations, incorporates custody services, and establishes a detailed framework for stablecoins while prohibiting algorithmic stablecoins.

Following the implosion of FTX in November 2022, the Bahamas sought to fortify its crypto regulations, aiming to restore confidence and reaffirm its status as a credible financial hub.

At a conference last October, Prime Minister Davis emphasized that the DARE Act would introduce measures to clarify stablecoin regulations and implement stronger investor and consumer protection mechanisms, among other changes.

“This is a testament to our commitment to robust risk management,” said Christina Rolle, Executive Director of the Securities Commission. “We have created a framework that not only focuses on investor protection but also encourages responsible innovation.”