Bermuda Welcomes Digital Asset Business Act 2018
The Digital Asset Business Act 2018 (DABA) became operative on 10 September 2018. The initial application fee is $2,266. Additional fees are payable upon the granting of a licence. These fees are dependent on estimated client receipts with annual fees calculated on the same basis thereafter.
Ancillary DABA Materials
Our June 2018 News Alert provided details of the activities licensed under DABA. Now that DABA is operative, it is open for the Minister of Finance, after consulting with the Bermuda Monetary Authority (BMA) to make regulations prescribing anything which may be prescribed under DABA and for its implementation generally.
Under section 5 of the DABA, the BMA is required, as soon as practicable, to publish a statement of principles. The DABA statement of principles will include the following:
- interpreting the minimum criteria and grounds for revocation of a licence;
- exercising its power to grant, revoke or restrict a licence;
- exercising its power to obtain information and reports and to require production of documents
- exercising its power to impose a civil penalty, censure publicly, make a prohibition order and to publish information about any matter to which a decision notice relates
The BMA may also issue codes of practice in connection with the manner by which licensed undertaking shall carry on digital asset business together with rules and other prudential standards that may be made in connection with certain actions and obligations of a licensed entity.
In that regard, the Digital Assets Business (Prudential Standards) (Annual Return) Rules 2018, the Digital Asset Business (Cybersecurity) Rules 2018 and the Digital Asset Business (Client Disclosure) Rules 2018 were published in the Official Gazette on 11 September 2018, effective 7 September 2018. Sector-Specific Guidance Notes for Digital Assets Business are expected to be finalised in the near future.
Should you wish to discuss making an application for a digital asset business licence or have any queries in relation to the ancillary DABA materials, please reach out to one of our Technology and Innovation experts.