The Securities Commission of The Bahamas has rated the digital assets sector’s money laundering, terrorist financing and proliferation financing risk as Medium-High for 2025. Risk before mitigation was 0.68 on a scale of zero to one, driven primarily by entity vulnerability of 0.79, while mitigating measures reduced residual risk to 0.32. The rating reflects a concentrated sector serving an almost entirely foreign client base through remote onboarding, rapid cross-border transfers and interactions with unregistered overseas virtual asset businesses. The sector comprised 32 registered businesses with 2.16 million client relationships and USD 33.65 billion in client assets, with the two largest participants accounting for most activity. Foreign clients represented 99.9% of the total. Blockchain analytics identified indirect exposure to mixing services and sanctioned addresses, but reporting registrants screened 100% of transactions. Travel Rule information was complete for about 99% of transfers when weighted by client base and 96% on a simple average, although deficiencies at a small number of registrants require remediation. The commission will maintain intensive supervision of systemic platforms and expects registrants to evidence full Travel Rule compliance, preserve complete blockchain analytics screening and act on mixer or sanctions exposure. Firms must also hold client assets predominantly in cold storage under documented key management governance and conduct counterparty due diligence for transfers involving unregistered overseas services.

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