Bahamas Passes Crypto Law Designed to Prevent FTX, Terra Disasters - Decrypt
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Bahamas Passes Crypto Law Designed to Prevent FTX, Terra Disasters
Following the collapse of FTX and Terraform Labs, The Bahamas has introduced crypto regulation to prevent a repeat. The Bahamas has passed a new crypto law which aims to adapt to how the industry has changed since 2020, following the
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Summary
- 🇧🇸 The Bahamas has enacted a new crypto law, DARE 2024, to prevent disasters like FTX and Terraform Labs' collapses.
- đź”’ The law introduces strict rules for businesses handling digital asset custody, ensuring customer assets are kept separate from corporate funds.
- ⚖️ It addresses issues from the FTX collapse, where commingled funds led to customer withdrawal problems.
- đź“ś A new disclosure regime mandates staking services to inform clients about the staking process, potential rewards, and penalties.
- đź’ˇ Staking allows users to earn rewards by pledging their tokens to secure the network, with centralized exchanges offering this as a service.
Top Highlights
- Bahamas Passes Crypto Law Designed to Prevent FTX, Terra Disasters Following the collapse of FTX and Terraform Labs, The Bahamas has introduced crypto regulation to prevent a repeat.
- The Bahamas has passed a new crypto law which aims to adapt to how the industry has changed since 2020, following the collapse of Sam Bankman-Fried’s FTX and the failure of Do Kwon’s Terraform Labs. The Digital Assets and Registered Exchanges Act 2024 (known as DARE 2024) most notably introduces new rules for businesses providing custody of digita...
- This includes requirements to maintain “appropriate procedures” that keep digital assets “separate and insulated” from the business’s estate as well as segregating holdings from “other non-client digital assets.” The collapse of FTX was partially the result of commingled customer and corporate funds, which made it impossible for customers to withd...
- DARE 2024 also introduces a “disclosure regime” which requires staking services to provide key information about the staking process, including how the asset is being staked, the rewards to be expected, and any potential penalties the client may face. Staking involves crypto network participants pledging their tokens to the network for a certain l...
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