The former cryptocurrency exchange FTX was based in the Bahamas. The island nation was not a random choice for the company's executives, given the rather lax regulations compared to the United States.
However, the crisis caused by the collapse of FTX has been so severe that the country's regulators have begun to consider a stricter review of their regulations.
A new law to better control the use of cryptocurrencies in the Bahamas
After the collapse of FTX, regulators from different countries around the world started to take a tougher stance towards operators in the cryptocurrency world.
In the United States, the main financial products regulator, the SEC, has literally declared war on most of the major cryptocurrency platforms. Some have received subpoenas, while others have been fined millions of dollars.
With the Bahamas being the former headquarters of the fallen platform, it is only natural that its regulators were also alerted after the disaster that followed the fall of FTX.
In a statement released Tuesday by the Bahamas Securities Commission, the Caribbean nation's lawmakers are seeking to tighten cryptocurrency laws.
The new bill will focus on the adoption of significant measures on stablecoins, Proof-of-Work and token mining of staking. According to the executive director of the regulator, once approved, the new law could become one of the most advanced in the world on digital assets.
However, it is not the first time that the Bahamian authorities pass a law on cryptocurrencies. Indeed, in 2020 they already passed a law officially called the Digital Assets and Registered Exchanges Act. It is precisely this progressivism that would have attracted Sam Bankman-Fried and his cryptocurrency platform in 2021.
A new law motivated by the fall of FTX
If at the time (2021) FTX was the second cryptocurrency platform in terms of value, it has undergone a dramatic collapse in November 2022, just one year after its migration.
After the platform shut down, Sam Bankman-Fried was the subject of allegations, including that he embezzled funds from the company. These funds were allegedly used, among other things, to purchase luxury villas in the Bahamas.
He pleaded not guilty to charges of fraud brought against him by the United States Department of Justice. According to members of FTX's new management, the platform's downfall is mostly a result of the mismanagement that was the norm under SBF's tenure.
The new Bahamian law specifies that all operators of any digital asset platform must ensure that the systems and controls used in their operations are adequate and appropriate to the scale and nature of their business.
The bill also intends to present a comprehensive new regulatory framework for stablecoins to the public. Some analysts believe that this is a response to the crisis caused by the collapse of Terra USD stablecoin Terra last year.
