Authorities in Bahamas are seeking to pass a new regulatory framework for cryptocurrency token sales, as part of the government’s efforts to help the country become a jurisdiction of choice for blockchain and fintech startups.
The Securities Commission of the Bahamas (SCB) has filed a draft of the new bill that will regulate token offerings, which are not deemed securities. The draft lays out a procedure for registering such offerings and informing authorities and investors on the details of a token sale.
If passed, the proposed regulation will apply to token issuers, exchanges, wallet providers, and any individual looking to offer services within initial token markets. The draft bill ensures all businesses publish a full description of their project, state any form of changes in the offering, and regularly update their memorandum.
Additionally, the bill outlines that the project creators should disclose all information that negatively affects the interest of token-buyers. If issuers fail to give such details, they will attract a fine of 10,000 Bahamian dollars (about $10,000). Notably, failure to comply with the proposed regulation will see business pay $500,000 or imprisonment of up to five years.
The draft bill was submitted on March 27 for public consultation. Comments will be gathered until May 28. The executive director of the commission, Christina Rolle, stated that the commission appreciates the comments and recommendations and the period of consultation will likely be extended for another month.
“In late 2017, we started receiving a lot of interest in the jurisdiction for the registration of tokens. When we started to benchmark what was happening around the world, we saw that we needed to create a legal framework,” Rolle told reporters.
Rolle added that the agency, together with the Ministry of Finance, received a lot of inquiries from token projects looking to set up in the country. Following this, the commission decided to create guidance that will give the token projects a legal certainty. These token projects are, however, to be distinguished from securities. According to Rolle, the criteria for identifying security and utility tokens are still to be drafted and are expected to be ready before the end of May.
Bahamas is following in the footsteps of countries like Malta, Bermuda, and Gibraltar who have already taken steps in creating a legal framework for cryptocurrencies and initial coin offerings.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
