Crypto-funded debit card in Bahamas
A card program where customer fiat balances are funded from crypto holdings, typically through an off-ramp at point of sale or top-up.
Crypto debit card 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, KYC procedures, and reporting of violations — applies to all digital asset business activities (bs.licensing.amlkyc-mandatory-compliance-with-amlcft)
- KYC obligations for all customers (cardholders) under the Financial Transactions Reporting Act 2018 and DARE Act Rules (bs.licensing.amlkyc-mandatory-compliance-with-amlcft)
- Suspicious transaction reporting obligations under the Anti-Terrorism Act 2018, Proceeds of Crime Act, and Financial Transactions Reporting Act (bs.licensing.supporting-laws-proceeds-of-crime)
- Appointment of a local MLRO (Money Laundering Reporting Officer) as part of the compliance officer requirement (bs.licensing.prepare-documents-business-plan-proof)
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)
- Must appoint local compliance officer, directors, and senior management subject to fitness/propriety evaluation by SCB (bs.licensing.local-presence-incorporation-as-an)
- Capital minimum of $150,000–$500,000 assessed case-by-case by SCB based on business model and risks (bs.licensing.capital-minimum-requirements-vary-from)
- SCB authorizes specific services only; no expansion without re-approval (bs.licensing.approval-and-ongoing-scb-authorizes)
- Crypto-to-fiat conversion (off-ramp) is regulated as digital asset exchange under DARE Act, requiring SCB authorization as a payment processor/exchange (bs.licensing.payment-processors-accepting-payments-in, bs.licensing.exchanges-trading-exchanging-cryptocurrencies-fiat-to-crypto)
Key Risks
- The Bahamian regulatory framework does not have a dedicated 'crypto debit card' license category — the operating model must be structured across the exchange (conversion) and payment-processor authorizations, creating structural complexity
- Partner bank or BIN-sponsor arrangements are not specifically addressed in DARE Act 2024 facts; reliance on a local banking partner may be difficult given limited local payment infrastructure
- FTX enforcement precedent (bs.enforcement.entity-targeted-ftx-trading-ltd) signals heightened regulatory scrutiny for digital asset businesses in The Bahamas
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.
Payment processors: Accepting payments in digital assets, token issuance/ICOs, transactions on behalf of clients.
Custody providers: Custodial services using encrypted keys, wallet services, administration of crypto portfolios, staking.
Capital: Minimum requirements vary from $150,000 to $500,000 (exact amount assessed case-by-case by SCB based on business model and risks).
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.
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.
IBC Act 2020: Company incorporation; https://www.scb.gov.bs/legislation/.
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).
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.
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 — A crypto-funded debit card program can operate in The Bahamas but requires: (1) IBC incorporation with local registered office/agent and compliance officer, (2) SCB authorization for both digital asset exchange (crypto-to-fiat conversion) and payment processing, (3) $150k–$500k minimum capital assessed case-by-case, and (4) full AML/CFT program under DARE Act 2024; however, the framework lacks a specific 'crypto debit card' license category, and partner-bank/BIN-sponsor arrangements are not explicitly addressed in the regulations.
Questions this verdict aims to answer
- What e-money / payment-institution license is required?
- How is the crypto-to-fiat conversion regulated?
- What KYC and AML obligations apply to cardholders?
- What partner-bank or BIN-sponsor arrangements are required?