Bermuda Courts Crypto Companies With Advanced Regulation

Bermuda is positioning itself as a destination of choice for cryptocurrency companies with a comprehensive regulatory framework despite broader economic turmoil and major crypto sell-offs.

Bermuda, one of the first countries globally to implement a robust legal and regulatory framework for digital assets, is confident that it can add to the 14 cryptocurrency companies already registered, despite the recent collapse of TerraUSD and the drop in bitcoin price.

“We are aware of the recent devaluation in the price of cryptocurrencies and remain confident that it does not threaten the island’s ability to become a crypto hub,” said the island-nations’ economy and labor minister, Jason Hayward.

Lack of clarity hampers growth

With Bermuda being a longstanding hub for the insurance and reinsurance industry and jurisdiction with 27% of its economy coming from international companies, locals are well-equipped to handle the influx of new crypto companies, competing with the likes of Malta and Liechtenstein. The regulations come at a time when crypto companies are calling the lack of regulatory clarity a pivotal barrier to the industry’s growth. The U.S. is one of the countries lacking regulatory clarity. President Biden recently issued an executive order commissioning a multi-agency research effort into regulating crypto. At the same time, the Financial Conduct Authority in the U.K. has laid out strict anti-money laundering policies for companies to comply with before they are allowed to do business.

Laws have been a few years in the making

Bermuda has been doing its homework since 2018, when it launched new guidelines for initial coin offerings and digital business assets, namely the Companies and Limited Liability Company Amendment Act 2018 and the Digital Asset Business Act. Companies use initial coin offerings to raise capital by issuing new tokens granting holders a particular utility in the company’s business activities or a stake in decision-making. Initial coin offerings are regarded as restricted business activities, requiring the approval of the Bermuda Monetary Authority. A business does not need a physical office to issue tokens, but must be registered in Bermuda. Registered companies must comply with anti-money laundering and anti-terrorism financing regulations.

The island nation has already registered 14 compliant companies, four of which are bonafide crypto companies, while the others run other digital asset businesses, says the CEO of the monetary watchdog, Craig Swan. BlockFi, stablecoin issuer Circle, and Bittrex Inc all have regional operations.

President of the Financial and International Business Association, David Schwarz, said that Bermuda is at the forefront of the crypto regulation race while acknowledging the need for active policing and enforcement of applicable laws.

The BMA has commenced training for banks and insurers to strengthen the resolve to partner with crypto companies by educating them on the anti-money laundering policies expected by the BMA from crypto companies.

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The post Bermuda Courts Crypto Companies With Advanced Regulation appeared first on BeInCrypto.

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