Galaxy Digital Subsidiary Gets Regulatory Approval To Set Up Shop In The Bahamas

Galaxy Bahamas, a subsidiary of Galaxy Digital, Mike Novogratz's crypto investment firm, has recently received regulatory approval to operate in the Bahamas.

The Securities Commission of The Bahamas has authorized the company to operate as a digital asset business under the country's Digital Assets and Registered Exchanges Act of 2020, according to a report by The Block.

The approval paves the way for the company to offer trading, custody, money services, market making, and staking services in the Bahamas.

According to a statement made by the firm in a February filing, "In light of the FTX dispute, customers, counterparties and regulators may view operations within the Bahamanian cryptoeconomy as more risky than operations in other jurisdictions".

This comes amid increasing regulatory scrutiny of the crypto industry, with Paxos being ordered by the New York Department of Financial Services to stop issuing Binance USD BUSD/USD, and Kraken agreeing to settle charges brought by the Securities and Exchange Commission for failing to register its staking program.

Also Read: Coinbase CEO Brian Armstrong Advocates For Clearer Crypto Regulations In Washington D.C.

Despite this regulatory scrutiny, Galaxy Digital maintains that it adheres to "governance controls and risk-management practices" in all jurisdictions, including the Bahamas.

"Our operations in the Bahamas are no different. We perform due diligence on customers and counterparties in all jurisdictions and disclose audited financial statements, so customers and shareholders have full transparency into our business," said Mike Wursthorn, head of communications at Galaxy Digital.

Galaxy Bahamas Ltd. plans to operate physically from the Bahamas and initially serve as an extension of the company's trading, custody, and money services operation businesses.

The move by Galaxy Digital follows the company's recent announcement of plans to acquire BitGo, a crypto custodian, in a deal worth $1.2 billion, which is expected to close in the second quarter of 2021.

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