Bahamas Crypto License

The Bahamas has taken a leading position in adopting innovative digital products and the development of fintech. The global rise in popularity of cryptocurrencies has led to tighter regulatory control, making the choice of jurisdiction extremely important for investors. A Bahamas digital asset license is a confirmation of compliance with international AML/KYC standards, legal permission to operate in a progressive legal environment, and acceptance by the entire crypto community. The experts at Gofaizen & Sherle will help you meet all the requirements for conducting crypto operations in this jurisdiction.

The Bahamas offers a transparent regulatory framework supervised by the Securities Commission (SCB) and operating under the DARE 2024 Act. Upon approval by the SCB, a Bahamas crypto license allows you to carry out:

Token issuance, ICOs.
Exchange trading of cryptocurrencies (derivatives, options, etc.).
Custodial services using encrypted keys.
Broker-dealer services (exchange, sale).
Investment, administration of crypto portfolios, and conducting transactions on behalf of clients, as well as staking.
Accepting payments from clients in digital assets.
Consulting on investing in crypto assets, marketing, and financial services.

SCB has the exclusive right, as the crypto market develops and the need arises, to adapt regulatory rules and regulate additional areas related to cryptocurrencies. The DARE Act applies to all legal entities (regardless of location) conducting business with residents of the islands.

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Key Benefits of Obtaining a Crypto License in the Bahamas

Clear licensing principles.

The DARE Act has been specifically modified to meet the needs of the market and its participants, setting out the basic, simple requirements and principles that all operators must comply with.

Effective mechanisms to combat the legalization of illegal income.

The authorities of the jurisdiction are focused on ensuring that international AML/KYC standards are met by all market participants. This ensures the reliability of business reputation and recognition by the global community, as well as contributes to the expansion of business ties.

Legitimate environment.

This progressive jurisdiction provides opportunities for new projects to get off the ground quickly and for established companies to develop under SCB administration. The authorities view the crypto business as offering enormous prospects for the growth of the local economy and are therefore doing everything possible to promote it. In 2020, the Central Bank issued the Sand Dollar (CBDC), an official digital currency that trades 1:1 with the Bahamian dollar.

Loyal tax system.

One of the incentives for doing business here is that IBCs are not subject to income tax, capital gains tax, profit tax, or dividends; there is only an annual license fee.

Closed registries.

The Beneficial Owner Registry Act of 2018 provides for closed databases of company beneficiaries/owners/shareholders, which can only be accessed by authorized government agencies.

Key financial center.

There are about 245 financial institutions (including banks and trusts) officially registered in the jurisdiction. Financial transactions for local crypto companies are available thanks to the work of giants such as CITIBANK, Scotiabank, and RBC Royal Bank.

Bahamas Cryptocurrency Regulation

The Bahamas is one of the top offshore jurisdictions because it offers favorable conditions for global business scaling. Offshore crypto licensing in the Bahamas is a legal way to prove to future business partners and users your commitment to business transparency and compliance with legislation.

The main legislative act for crypto entrepreneurs is:

The Digital Assets and Registered Exchanges Act 2024 (DARE Act), which, in addition to being the basis for regulating the cryptosphere, also expanded the scope of licensing (staking, storage), established regulations for stablecoins, and introduced classifications for NFTs.
The AML/KYC requirements for Bahamas crypto licenses are laid out in the Comprehensive Review Update Policy, the Digital Assets and Registered Exchanges Rules, the Anti-Terrorism Act 2018 (ATA), and the Financial Transactions and Reporting Act 2018 (FTRA).
The Data Protection Act (DPA) specifies who has the right to access, collect, and transfer personal data, and establishes penalties for violators (up to $100,000).
The Beneficial Owner Registry Act of 2018 introduced rules regarding access to information about company owners/shareholders.

Legal requirements for crypto license in the Bahamas

SCB prioritizes ensuring the integrity and transparency of crypto activities, ensuring that all participants operate within the legal framework, and creating a safe environment for investors.

Bahamas crypto licensing requirements (DARE Act Part II, Part III, Sec. 18-21):

Compliance with all AML/CFT regulatory requirements. According to Part III, Sec. 33-35, applicants for a license must prove that they will apply AML/KYC procedures, assess risks, report identified violations, and comply with the provisions of the Proceeds of Criminal Activity Act, the Anti-Terrorism Act, and the Financial Transactions Reporting Act. The applicant must also hire an AML/compliance manager with the appropriate professional qualifications (who undergoes an interview with the SCB), who will subsequently interact with government agencies, submit reports, and analyze compliance with the law. These functions may be outsourced, but only with the approval of the SCB.
Proof of sufficient capital. Sec. 12 states that the applicant must prove that it has sufficient resources to carry out the relevant activities. On average, the amount ranges from USD 50,000, but it all depends on the type of activity, business model, and development prospects. The SCB requires confirmation of the origin of the capital. In addition, the amount of capital will subsequently affect the amount of the annual commission, the rates of which are specified in the appendices to the IBC Law.

CEO integrity and competence check. Key managers/CEOs are subject to high standards, such as sufficient experience with digital assets, understanding of risks, and business models. When applying, a separate Form 3 must be completed for the Regulator, providing information about the manager and their professional qualifications. SCB conducts interviews with the CEO.
Operational and technical capabilities. Applicants provide a detailed description of all technical data management and storage systems, operational mechanisms, risk management, and cyberattack response systems.
Insurance coverage. Each applicant must provide SCB with proof that it has sufficient insurance coverage and regulatory capital to mitigate operational risks.
Main address on the islands. The application must indicate the address of the office and all contact information (e-mail, telephone, website).

Steps for Obtaining a Crypto License in the Bahamas

The crypto licensing process in the Bahamas can take anywhere from 4 to 12 months. The SCB requires comprehensive information about the applicant’s future activities, as well as proof that the crypto operator will be able to financially, legally, and technically perform the stated functions. Steps to get a crypto license in the Bahamas:

Preparation.

to 1 business week

Step 1

Initially, the applicant must register a legal entity, for which the following is required (by the provisions of the IBC Act of 2020):

Select a unique name for the company and reserve it with the Department of the Registrar General. It is prohibited to use words (bank, insurance) in the name without obtaining the relevant permission.
Prepare corporate documents: Memorandum, Articles of Association.
Prepare a detailed business plan describing the structure and objectives of the business.
Appoint a local registration agent and rent an office.
Determine who will manage the company (at least one manager).
Pay government fees as per the Appendix to the IBC Act 2014.

Apply to the SCB.

Step 2

The Securities Commission must review the information from the completed forms and supporting documentation, including but not limited to:

Main company documents (Articles of Association, Memorandum, Certificate of Registration).
Information about the founders (the main requirement is good standing); for managers/CEOs, a separate questionnaire must be submitted, indicating all professional qualities and experience. A separate questionnaire must also be completed for the AML manager.
Description of AML/KYC procedures, transaction monitoring, and reporting of suspicious transactions, control measures, and risk management.
Description of cybersecurity protocols, user asset security systems, and protection against cyberattacks.
Evidence of sufficient financial resources for conducting the selected type of activity, reserve capital, and insurance.
Payment of government fees depends on the type of activity: for registration of a crypto exchange – application fee – $6,250, registration fee – $18,750; other types of digital businesses pay $3,750, and there is also a government fee of $575 for the registration of directors and AML managers.

SCB compliance.

Step 3

The Securities Commission has set stringent requirements for the experience and knowledge of AML managers and administrators, so they undergo an interview and can only start working after approval by the authorities. In addition, the company must indicate the source of its initial capital and prove that it meets the requirements for sufficient regular capital and insurance.

Approval from the SCB and commencement of operations.

Step 4

The license is issued for an indefinite period, but annual government fees must be paid for its renewal (from $3,750 to $18,750), physical presence must be confirmed, and AML/CFT procedures must not be violated.

The Securities Commission has the right to revoke or suspend a license and impose sanctions (DARE Part VI, Sec. 60) in the event of violations, fraud, etc.

Most often, applicants are denied due to:

Ineffective AML/CFT measures.
Insufficient cybersecurity measures for storing digital assets and executing cross-border crypto transactions.
Failure to comply with financial reporting standards.

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Taxes and Financial Reporting

The Bahamas fintech license for crypto allows you to take advantage of tax benefits when conducting business operations, namely:

No corporate tax.
No capital gains tax.
No inheritance tax or dividend tax.
12% VAT.
Stamp duty from 2.5% to 10%.

Financial requirements have been established for fintech companies in accordance with the Financial Transactions Reporting Act and the DARE Act):

Maintain financial records and submit them annually for review (no later than 4 months after the end of the reporting year).
Hire an auditor to audit the financial records (report submitted to the SCB).
Keep records for 5 years at the registered office.

Conclusion

The Bahamas is adapting its legislation to meet the demands of the crypto community and the FATF requirements. The DARE Act has become a key regulation for anyone wishing to develop their digital business in one of the top offshore jurisdictions. Obtaining a license from the SCB provides a competitive advantage for digital businesses seeking a secure, tax-efficient, well-regulated, and innovation-friendly environment.

FAQ on obtaining a Bahamas crypto license

How is the crypto market regulated in the Bahamas?

The DARE Act 2024 is the decisive regulatory act for anyone wishing to obtain a license from the Securities Commission (SCB).

How much will it cost to obtain a crypto license?

The island authorities have introduced a differentiated fee depending on the type of activity chosen. To obtain a license to operate a crypto exchange, you will need to pay $18,750, and for other types of activities, $12,500.

How long does it take to obtain a crypto license?

The SCB has strict requirements for applicants. If there is no need to remedy any deficiencies, then within 6-12 months, you can obtain approval from the regulator.

What is the minimum authorized capital for a crypto company?

The minimum authorized capital depends directly on the future fintech activities, on average, $50,000 or more to prove financial solvency to the Regulator.

Is it possible to obtain a license remotely?

Yes, with the help of a registration agent.

Does a crypto company need a local office in the Bahamas?

Yes, a physical office is required to store all company documentation and undergo inspections by government agencies.