Crypto ATM / kiosk operator in Bahamas
Physical kiosks that exchange cash for crypto (and sometimes vice versa). High-cash AML risk profile.
Crypto ATM is conditionally permitted in Bahamas with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- Mandatory AML/CFT compliance under DARE Act (Part III, Sec. 33-35), including risk assessments, reporting of suspicious transactions, and KYC procedures (bs.licensing.amlkyc-mandatory-compliance-with-amlcft)
- Reporting obligations under the Financial Transactions Reporting Act 2018 (bs.licensing.supporting-laws-proceeds-of-crime)
- Compliance also required under the Anti-Terrorism Act 2018 (ATA) and Proceeds of Crime Act (bs.licensing.amlkyc-mandatory-compliance-with-amlcft)
- Appointment of a local compliance officer and MLRO as part of licensing (bs.licensing.secure-local-elements-registered-officeagent)
- Ongoing AML/KYC policies must be submitted as part of the licensing application (bs.licensing.prepare-documents-business-plan-proof)
- Fitness and propriety evaluation for compliance officer and MLRO (bs.licensing.local-presence-incorporation-as-an)
Key Restrictions
- Must incorporate as an International Business Company (IBC) under the IBC Act 2020 with a registered office/agent in The Bahamas (bs.licensing.local-presence-incorporation-as-an)
- Appointment of local compliance officer, directors, and senior management subject to fitness/propriety evaluation (bs.licensing.local-presence-incorporation-as-an)
- SCB authorizes specific services only; no expansion without re-approval (bs.licensing.approval-and-ongoing-scb-authorizes)
- Capital minimum requirements vary from $150,000 to $500,000, assessed case-by-case by SCB (bs.licensing.capital-minimum-requirements-vary-from)
- Must comply with corporate governance standards, risk management, technology security, operational insurance, and data protection requirements (bs.licensing.other-corporate-governance-standards-risk)
- No indication of a kiosk-specific or money-transmitter license category — ATM/kiosk operations would fall under the general DARE Act exchange/custody licensing framework
Key Risks
- High-cash AML risk profile for crypto ATMs/kiosks is not explicitly addressed in the DARE Act framework — regulator may apply enhanced scrutiny or impose additional conditions on a case-by-case basis
- No specific cash-transaction reporting threshold (CTR equivalent) identified in available facts — unclear what cash-in/cash-out reporting obligations apply beyond general suspicious transaction reporting
- Enforcement precedent limited — only noted enforcement targets FTX, not kiosk operators; SCB enforcement posture on cash-heavy crypto business models is untested
- Capital minimum ($150k–$500k) is significant and assessed case-by-case, creating regulatory uncertainty for operators with lower-margin kiosk economics
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Exchanges: Trading, exchanging cryptocurrencies (fiat-to-crypto, crypto-to-crypto, centralized/decentralized), derivatives, options, broker-dealer services.
AML/KYC: Mandatory compliance with AML/CFT, including risk assessments, reporting violations, KYC procedures; governed by DARE Act (Part III, Sec. 33-35), Comprehensive Review Update Policy, Digital Assets and Registered Exchanges Rules, Anti-Terrorism Act 2018 (ATA), Financial Transactions Reporting Act 2018 (FTRA), Proceeds of Criminal Activity Act.
Local presence: Incorporation as an International Business Company (IBC) required, with a registered office/agent in the Bahamas; appointment of local compliance officer, directors, and senior management subject to fitness/propriety evaluation.
Capital: Minimum requirements vary from $150,000 to $500,000 (exact amount assessed case-by-case by SCB based on business model and risks).
Other: Corporate governance standards, risk management, technology security, reporting/documentation, operational insurance, data protection.
Approval and ongoing: SCB authorizes specific services; no expansion without re-approval. Timeline not fixed but involves comprehensive evaluation.
Prepare documents: Business plan, proof of capital, director/shareholder details (fitness/propriety checks for directors, CEO/CFO/COO, compliance officer, MLRO, key shareholders), AML/KYC policies, governance/risk management frameworks.
Secure local elements: Registered office/agent, appoint compliance officer.
DARE Act 2024: Core law (Parts II/III, Sec. 9, 18-21, 33-35); available via SCB website: https://www.scb.gov.bs/legislation/.
The Digital Assets and Registered Exchanges Act (DARE Act) was originally enacted in 2020 and subsequently amended, including by the Digital Assets and Registered Exchanges (Amendment) Act, 2024. It regulates token issuance, exchanges, custodians, stablecoins (with reserve backing and audits under Section 49), NFTs, staking, DeFi platforms (Sections 5, 15, 33), and requires AML/CFT compliance (Sections 18-21, 33-35).
IBC Act 2020: Company incorporation; https://www.scb.gov.bs/legislation/.
Bahamas supporting laws include the Proceeds of Crime Act (as amended), Anti-Terrorism Act (as amended), Financial Transactions Reporting Act 2018, and subsequent amendments under the counter-proliferation financing framework; the Securities Industry Act 2024 and Digital Assets and Registered Exchanges (AML/CFT) Rules 2022 are not confirmed as current by Bahamas-specific sources and may be outdated or superseded.
Regulator: Securities and Exchange Commission (SEC)
Entity Targeted: FTX Trading Ltd. and Samuel Bankman-Fried (CEO and co-founder). Violation Type: Securities fraud scheme defrauding equity investors. Penalty Amount: Not specified in available results. Outcome: FTX filed for bankruptcy after a spike in customer withdrawals exposed an $8 billion shortfall in accounts. The SEC charged Bankman-Fried with orchestrating a scheme that defrauded equity investors; FTX had raised more than $1.8 billion from investors, including approximately $1.1 billion from about 90 U.S.-based investors. The Securities Commission of the Bahamas subsequently froze assets of one of FTX's subsidiaries.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — Crypto ATM/kiosk operators are permitted in The Bahamas under the DARE Act's exchange/custody licensing framework, but must incorporate locally as an IBC, obtain SCB authorization with $150k–$500k capital assessed case-by-case, and comply with full AML/CFT obligations, though no kiosk-specific or cash-transaction reporting rules are explicitly defined in available sources.
Questions this verdict aims to answer
- What money-transmitter / kiosk-specific license is required?
- What cash-transaction reporting thresholds apply?
- What enhanced-KYC obligations attach to cash-in / cash-out?