Galaxy Digital gets approval for Bahamas subsidiary amid rising US regulatory uncertainty

Galaxy Bahamas, a subsidiary of Mike Novogratz’s crypto investment firm, received approval from the Securities Commission of The Bahamas in December for registration as a digital asset business under its Digital Assets and Registered Exchanges Act of 2020. 

Galaxy Bahamas Ltd. will physically operate out of the Bahamas and intends to initially serve as an extension of the company’s trading, custody and money services operation businesses. It will also offer market making and staking services, the latter of which has recently seen increased scrutiny in the U.S.

“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,” the firm said in a February filing.

The move comes amid increased scrutiny of crypto firms, including recent news that the New York Department of Financial Services ordered Paxos to stop issuing Binance USD. Last week, crypto exchange Kraken agreed to settle charges brought by the Securities and Exchange Commission for failing to register its staking program.

“Wherever Galaxy operates, our governance controls and risk-management practices always apply,” said Mike Wursthorn, head of communications at Galaxy Digital. “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.”

(Updates with comment from Galaxy Digital in last paragraph.)

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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