Stage 1 – ICO Legislation

The ICO legislation will endeavour to strike a balance between market integrity and consumer protection. Under the ICO legislation, an ICO will be treated as a restricted business activity which will require consent from the Minister of Finance. Other key provisions of the ICO legislation will include:

the establishment of a FinTech Advisory Committee to assist with consent applications;

establishing minimum requirements for all ICOs (including a Code of Conduct); and

setting out publication and content requirements of ICO white papers.

Stage 2 – Virtual Currency Business Consultation Paper (VCB Consultation Paper)

The Bermuda Monetary Authority released a VCB Consultation Paper on 11 April 2018 which includes the following draft legislation:

Virtual Currency Business Act 2018 (VCB Act)

Virtual Currency (Cybersecurity) Rules 2018

Virtual Currency (Client Disclosure) Rules 2018

Comments regarding the proposals, outlined in the consultation paper, are due by 2 May 2018. If you are interested in reviewing the VCB Consultation Paper, please contact us for further details.

The VCB Act will seek to establish a robust regulatory framework to govern virtual currency business (VCB) within or from Bermuda and will include a Code of Practice and a Statement of Principles. In anticipation of a variety of businesses seeking to be licenced as VCBs, there will be a tiered licensing structure which will include two classes of licence: Class F which will be a full licence, and Class M which will be a defined period licence that is analogous to a regulatory “sandbox” environment.

Stage 3 – E-IDs

The third stage of the timeline is proposed for July 2018 with the establishment of a Bermuda E-ID scheme. The scheme will bolster Bermuda’s FinTech credentials by providing a single electronic aggregation platform to comply efficiently with Know Your Customer and Anti-Money Laundering rules. A key feature of this platform is to enable individuals to have control over their data by allowing them to grant data permissions for specific data for a specified time.

Stage 4 – Virtual Currency Exchanges

The final stage of the initiative is planned for September 2018. The working group will be developing a legal and regulatory framework for virtual currency exchanges.

Appleby has a team of lawyers already advising existing clients and is ready to assist others who are interested in establishing and conducting virtual currency business in or from Bermuda. We will provide further updates with respect to these legislative developments as matters progress. Should you have any queries, or wish to obtain any advice, please do not hesitate to contact us.

PDF Version

Share
Twitter LinkedIn Email Save as PDF
Key Contacts

Matthew Ebbs-Brewer

Partner: Bermuda

T +1 441 298 3226
E Email Matthew

Steven Rees Davies

Partner, Joint Global Head of Technology & Innovation: Bermuda

T +1 441 298 3296
E Email Steven

Megan Denos

Counsel: Bermuda

T +1 441 298 3546
E Email Megan

Jennifer Eve

Counsel: Bermuda

T +1 441 298 3560
E Email Jennifer

More Publications
7 Aug 2020 |

Enforcement of Judgments 2020 – Trends and Developments

Bermuda is a self-governing overseas territory of the United Kingdom. It has a population of over 60...

Contributors: Hannah Tildesley
29 Jul 2020 |

Digital assets and Bermuda’s fintech future

The Government of Bermuda set the stage for developing the island’s fintech sector in early 2018 b...

24 Jul 2020 |

Flexible working, home working and the ‘new normal’

Over the last few months, employers and workers have had to get used to a new way of working. Many e...

22 Jul 2020 |

ILS Bermuda Executive Roundtable 2020

In response to the global spread of the novel coronavirus, Bermuda, like much of the world, entered ...

25 Jun 2020 |

ILS needs a buoyant secondary market to thrive – but electronic platforms must come first

A secondary market for ILS can only emerge once the broader market fully embraces electronic platfor...

24 Jun 2020 |

Health and Wellness – Employers Duties

With the current state of COVID-19, many employees are in the midst of now returning to work and oth...

4 Jun 2020 |

Choices of law, jurisdiction must be clear

Ideally, a contract will contain both a “choice of jurisdiction” and a “choice of law” claus...

26 May 2020 |

Technology & Innovation Update Q2 2020

Technological developments have been accelerating at an unprecedented pace in Asia - the first regio...

22 May 2020 |

Reopening workplaces: employment issues

As Bermuda takes the first tentative steps in its phased reopening plan, we review some of the key p...

20 May 2020 |

Threatened insolvency: Personal Exposure of Directors

During the challenging economic environment created by the COVID-19 pandemic, business resilience an...

Contributors: Jerome Wilson