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

Key Contacts

Matthew Ebbs-Brewer

Partner, Head of Funds & Investment Services: Bermuda

T +1 441 298 3226
E Email Matthew

Megan Denos

Counsel: Bermuda

T +1 441 298 3546
E Email Megan

Jennifer Eve

Counsel: Bermuda

T +1 441 298 3560
E Email Jennifer

Share
Twitter LinkedIn Email Save as PDF
More Publications
1 Sep 2021 |

Changes to rules on Permanent Residency Certificates

The Ministry of Labour has recently issued a policy paper, ‘Securing Permanency for Long-Term Resi...

26 Aug 2021 |

What to remember when an employee leaves

Just as when a new recruit is on-boarded, there are a variety of tasks an employer needs to deal wit...

23 Aug 2021 |

BMA seeks more seamless marketplace with ILS process enhancements

Recent changes made by the Bermuda Monetary Authority (BMA) to improve processes specific for catast...

17 Aug 2021 |

ILS Bermuda Executive Roundtable 2021

Despite the impacts of the Covid-19 pandemic and subsequent restrictions on travel and face-to-face ...

13 Aug 2021 |

A digital asset future: closer than we think

Most of us at some point in our lives have participated in a rewards programme either at our favouri...

26 Jul 2021 |

What not to forget when an employee leaves

There are many practical and ‘housekeeping’ matters that employers need to deal with when an emp...

Contributors: Jordan Knight
23 Jul 2021 |

Contributed surplus: it’s not capital!

Last week, in part one, we discussed the meaning of share premium, the various ways a company may us...

16 Jul 2021 |

Share premium: do you have it?

When the issuance of shares by a company is discussed, the first thought that comes to mind is the s...

2 Jul 2021 |

No question you’ll see more life reinsurers in Bermuda

While the emergence of property and casualty (P&C) startups in Bermuda is likely to be muted in ...

2 Jul 2021 |

Bermuda: An introduction to Dispute Resolution

This edition discusses Current Economic Conditions and Dispute Resolution Activity, Trends & Dev...

Contributors: Jordan Knight