Remote VASP serving residents in Bahamas
Foreign-incorporated entity that offers exchange, custody, or transfer services to residents of a jurisdiction without establishing a local entity or office.
Remote VASP 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 — governed by DARE Act, Comprehensive Review Update Policy, Digital Assets and Registered Exchanges Rules, Anti-Terrorism Act 2018 (ATA), and Financial Transactions Reporting Act 2018.
- Travel Rule compliance required: originating VASPs must identify originators, obtain/verify required data, screen for sanctions, retain records, and share data with beneficiary VASPs.
- Beneficiary VASPs must obtain/hold accurate data and make it available to authorities on request.
- Sanctions screening against OFAC, UN, and EU lists required before transactions.
- Appointment of a local MLRO (Money Laundering Reporting Officer) required.
- Capital minimum requirements from $150,000 to $500,000 assessed case-by-case by SCB based on business model and risks.
Key Restrictions
- Must incorporate as an International Business Company (IBC) in The Bahamas with a registered office/agent — no pure remote cross-border servicing without local presence.
- Must obtain SCB authorization specific to services offered (exchange, custody, payment processing, etc.); no expansion without re-approval.
- Appointment of local compliance officer, directors, and senior management subject to fitness/propriety evaluation by SCB.
- Local presence requirements: registered office/agent in the Bahamas and a local compliance officer mandatory.
Key Risks
- Operating without a license or local presence would violate the DARE Act 2024 and expose the operator to enforcement action by the SCB (Securities Commission of The Bahamas).
- FTX precedent shows the Bahamas SEC has enforcement authority and will act against unlicensed or fraudulent digital asset operations — significant reputational and legal risk for unlicensed remote operators.
- The licensing process has no fixed timeline and involves comprehensive evaluation, creating operational uncertainty for applicants.
- High capital requirements ($150k–$500k) combined with ongoing compliance costs (annual fee of $10,000) create a meaningful cost burden.
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.
Custody providers: Custodial services using encrypted keys, wallet services, administration of crypto portfolios, staking.
Payment processors: Accepting payments in digital assets, token issuance/ICOs, transactions on behalf of clients.
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.
Incorporate legal entity: Register an IBC via Registrar of Companies (submit incorporation documents/fees; IBC Act 2020 applies).
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).
Digital Assets and Registered Exchanges (DARE) Rules: Core rules applying AML/CFT/CPF to DABs, including Travel Rule compliance. [https://www.scb.gov.bs/wp-content/uploads/2023/04/The-Bahamas-Approach-to-the-Regulation-of-Digital-Asset-Businesses.pdf]
Originating VASPs: Identify originator, obtain/verify required data, screen for sanctions, retain records, and share with beneficiary VASPs.
Beneficiary VASPs: Obtain/hold accurate data and make it available to authorities on request.
No mandated technical solution (e.g., interoperability challenges persist globally). Sanctions screening against lists like OFAC, UN, EU is required before transactions.
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:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a remote VASP serving residents of The Bahamas must incorporate as an IBC with a local registered office/agent, obtain SCB authorization under the DARE Act 2024 (with $150k–$500k capital assessed case-by-case), and comply with full AML/CFT/Travel Rule obligations; pure cross-border unlicensed servicing without local presence is not permitted.
Questions this verdict aims to answer
- May a non-resident provider serve residents from abroad?
- Does cross-border service trigger licensing, registration, or AML obligations?
- What enforcement risk exists for unlicensed remote operators?