Custodial wallet / SaaS in Bahamas
Hosted wallet provider that holds keys on behalf of end users, often white-labeled to businesses (custody as a service).
Custodial SaaS 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
- Custodial wallet/SaaS providers must comply with mandatory AML/CFT obligations under DARE Act Part III, Sec. 33-35, including risk assessments, reporting violations, and KYC procedures.
- Compliance is governed by DARE Act, Comprehensive Review Update Policy, Digital Assets and Registered Exchanges Rules, Anti-Terrorism Act 2018 (ATA), and Financial Transactions Reporting Act.
- A local compliance officer and MLRO must be appointed, subject to fitness/propriety evaluation by SCB.
- Ongoing AML reporting and documentation obligations apply; specific transaction thresholds not stated in available facts but all custodial services are captured.
Key Restrictions
- Operator must incorporate as an International Business Company (IBC) in The Bahamas with a registered office/agent.
- Operator must appoint local compliance officer, directors, and senior management subject to fitness/propriety evaluation.
- SCB authorizes specific services and expansion requires re-approval — cannot offer services not in the license scope.
- Capital minimum requirements assessed case-by-case from $150,000 to $500,000 by SCB based on business model and risks.
- Operational insurance required as part of corporate governance/technology security standards.
- Proof-of-reserves and segregation rules are not explicitly detailed in available facts; stablecoin issuers under DARE Act Sec. 49 have reserve backing and audit requirements, but applicability to custodial wallet/SaaS is not stated.
Key Risks
- FTX precedent (FTX Trading Ltd. was Bahamas-incorporated and collapsed) has created heightened regulatory scrutiny and enforcement exposure in The Bahamas.
- Regulatory ambiguity exists around segregation, insurance, and proof-of-reserves requirements specific to custodial wallet/SaaS operators (not stablecoin issuers).
- The SCB assesses capital case-by-case, creating uncertainty on capital requirements for a SaaS/custody model.
- SaaS white-label arrangements may create ambiguity about which party (SaaS provider vs white-label client) bears primary AML obligations — facts do not explicitly address this split.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Custody providers: Custodial services using encrypted keys, wallet services, administration of crypto portfolios, staking.
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.
Incorporate legal entity: Register an IBC via Registrar of Companies (submit incorporation documents/fees; IBC Act 2020 applies).
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.
Submit to SCB: Complete application with fees ($3,000 application fee, $10,000 annual fee, plus others); SCB reviews for compliance.
Approval and ongoing: SCB authorizes specific services; no expansion without re-approval. Timeline not fixed but involves comprehensive evaluation.
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/.
SCB Guidance: "The Bahamas' Approach to the Regulation of Digital Asset Businesses" (PDF): https://www.scb.gov.bs/wp-content/uploads/2023/04/The-Bahamas-Approach-to-the-Regulation-of-Digital-Asset-Businesses.pdf.
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.
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.
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 — custodial wallet/SaaS providers are licensable under the DARE Act 2024 as custody providers, requiring IBC incorporation, local presence, SCB licensing (with $150K–$500K case-by-case capital), AML/CFT compliance, and fitness evaluations, though specific segregation, insurance, and proof-of-reserves rules for this model are not explicitly detailed in available facts.
Questions this verdict aims to answer
- What custody license / qualified-custodian status applies?
- What segregation, insurance, and proof-of-reserves rules apply?
- What AML obligations attach to the SaaS vs the white-label client?