• The Securities Commission of the Bahamas (SCB) has established new regulations for Virtual Assets Service Providers (VASPs) operating in its jurisdiction, including raising financial and reporting requirements.
• The SCB has enacted a blanket ban on algorithmic stablecoins after the FTX Exchange failed.
• Comments on the proposed guidelines will be accepted until the end of May, and by the end of Q2, the SCB hopes to have pushed the measures in the DARE Bill into law.
Stringent Crypto Regulations by SCB
The Securities Commission of the Bahamas (SCB) has instituted stringent new regulations for Virtual Assets Service Providers (VASPs) seeking to operate within its jurisdiction as a means of demonstrating that it has learned from the demise of the FTX Derivatives Exchange. The SCB claims it has raised financial and reporting requirements for exchanges, custodians, staking operators, and asset managers above what is required by its current regulations.
Blanket Ban On Algorithmic Stablecoins
The SCB is adopting a firm stance, where it will compel exchanges to have sufficient systems and controls that are reflective of their development. After the FTX Exchange failed, many in the sector questioned the SCB’s ability to effectively oversee the crypto sector. The depegging of Terraform Labs’ TerraUSD (UST) stablecoin around this time last year was a domino in a chain reaction that brought down digital currency ecosystems. Many crypto firms filed for bankruptcy as a result of these collapses. To prevent such incidents from occurring again, The SCB of Bahamas has enacted a blanket ban on algorithmic stablecoins.
Comments On Proposed Guidelines
The SCB has announced that comments on proposed guidelines will be accepted until end of May. Also by end-Q2, they hope to enact all measures stated in their Digital Assets and Registered Exchanges (DARE) Bill into law.
Learning From Demise Of FTX Exchange
The Securities Commission of Bahamas is taking steps to learn from failure of FTX Derivatives Exchange by implementing stricter regulations for VASPs operating within its jurisdiction with higher financial & reporting requirements than what is currently laid out in their existing regulations. This move demonstrates their efforts towards improving oversight monitoring across crypto sector & aligning standards with other advanced jurisdictions like EU & US etc.
The Securities Commission Of Bahrainis taking active steps towards regulating cryptocurrency companies & providing safer environment for its citizens who wish to invest or trade cryptocurrencies within its borders. It’s important that regulators take strict stances towards protecting investors from fraudulent activities or unstable investments due to lack regulation or lack proper oversight monitoring systems which is exactly what Bahamian regulator is doing here with introducing blanket ban on algorithmic stablecoins & higher scrutiny criteria before allowing any company dealing with virtual assets service providers authorization to operate within its jurisdiction