Digital asset regulation and tokenization in The Bahamas

A business issuing a digital asset from The Bahamas must determine whether the token falls under DARE or represents a security governed by another framework. That decision determines offering documentation and permissions for distribution, trading and custody.

The Bahamas also regulates DAO structures, but registering an organisation does not automatically authorise all its services. The practical business question is how to connect governance, token rights and each participant’s activities while keeping legal structure and operating permissions distinct.

How to classify a token under DARE or securities legislation

The Digital Assets and Registered Exchanges Act 2024, DARE, replaced the 2020 regime and took effect on 29 July 2024. Section 6 covers exchange, order execution and transmission, custody, advice, management, staking and other defined activities. Developing and distributing software is not by itself a digital-asset activity; the functions actually undertaken determine the assessment.

Section 3 excludes, among other cases, tokens with securities characteristics governed by the Securities Industry Act and certain NFTs whose function is not payment, investment or representation of another financial asset. A commercial label does not determine classification. Services provided from abroad also require examination of the territorial connection and recipient conditions specified in the Act.

What the Securities Commission registers and supervises

The Securities Commission of The Bahamas, SCB, registers and supervises providers and offerings within DARE. Its application portal distinguishes procedures and activity requirements. The authority may investigate applicants' resources, experience, conduct and controls; registering an entity does not endorse product returns or authorise every future service.

The registrant search should be checked by legal entity and regime. DARE also requires compliance officers and suspicious-transaction reporting to the Financial Intelligence Unit, FIU. A brand may use entities holding different permissions; contracts, functions, custody and territorial scope must therefore match the entity covered by the relevant authorisation.

Which permissions the business needs and what offerings require

Sections 7 to 12 of DARE require registration for in-scope business in or from The Bahamas. Applications include ownership, management and officer information, alongside resources and controls. A business already operating under another financial regime must check the procedure for adding activities; its existing licence does not automatically provide DARE coverage.

Offerings in or from The Bahamas fall under sections 36 to 48. Offering-memorandum exceptions carry information obligations and do not provide a general registration exemption. Section 41 requires a legal classification opinion. Voluntary registration under section 43 concerns offerings made neither in nor from The Bahamas, subject to the applicable admission requirements.

How token rights and a DAO structure fit together

If the SCB classifies an asset as a security, section 42(4) requires withdrawal of its DARE offering application and permits registration under securities legislation. The legal opinion, offering document and contract should identify the issuer, rights, transfer conditions and enforcement. A token linked to property or a portfolio does not by itself establish direct ownership of those assets.

The Decentralised Autonomous Organisations Act 2026, published on 25 March, requires an eligible underlying structure: an exempted partnership, purpose trust or licensed SMART fund. The SCB determines registration by reference to open-source code, a permissionless network, security and sufficient decentralisation. Separate personality from token holders follows the legal framework, not merely deployment of smart contracts.

Constitutive documents must address responsible persons, governance, treasury and token rights. The Act prohibits dividends to governance-token holders and subjects these assets to DARE; other token issues require additional analysis and notification. Section 8 requires annual evidence of smart-contract audits unless the SCB grants an exemption. These conditions distinguish informal DAOs from registered structures.

Which limits affect custody, staking and stablecoins

Section 18 of DARE requires separation of proprietary and client assets, position records and protection of assets in custody from provider creditors. Omnibus accounts require express consent and individual traceability. Lending or reuse requires prior consent, risk disclosure and compliance with other conditions; technical control over keys does not create unrestricted rights to use client funds.

Staking has specific requirements and also attracts custody duties where third-party assets are controlled. Sections 49 to 53 regulate stablecoin backing, reserve segregation, disclosure and redemption. Issuance of coins stabilised through the algorithmic supply adjustments described in section 49 is prohibited. Privacy-token issuance and commercial mining also face specific restrictions, without creating a general software-development ban.

What to prepare before registration or fundraising

Prepare a legal classification of the asset and a map of issuer, platform and custodian. Documentation should specify purchaser rights, transfer conditions and treatment of the underlying asset; check that each provider is permitted to perform its actual function.

For a DAO structure, add governance, responsible persons, treasury and code audits to the file. Do not design incentives on the assumption that a governance token may pay any dividend. For custody or staking, connect customer consent with records, reconciliation and limits on asset use before implementation.

To understand how this framework applies to your project, discuss your case with our team.