Digital Asset Business Act – Statement of Principles
In September 2018, the Bermuda Monetary Authority (the “BMA”) released their statement of principles pursuant to section 5 of the Digital Asset Business Act 2018 (the “DABA”). Before a licence may be granted to a digital asset business company, the BMA needs to be satisfied that the criteria under schedule 1 of the DABA are satisfied or are capable of being satisfied. Once licensed, digital asset businesses are subject to the authority’s continuing supervision and regulation including the criteria for licensing.
The statement of principles sets out how the BMA proposes to interpret the minimum criteria for licensing its class M and class F licenses as well as its approach to general supervision and the use of its enforcement powers.
Personal Information Protection Act 2016
There has been no change on introduction of Bermuda’s PIPA, which awaits the appointment of Privacy Commissioner.
Banks and Deposit Companies Amendment Act 2018
Bermuda’s Premier recently announced that the Government of Bermuda was close to finding a banking solution for the FinTech sector in Bermuda and was hopeful of making further announcements on the matter in the coming weeks. This would prove to be a major step forward for the industry in light of the limited number of banks around the world willing to service businesses that directly or indirectly work with digital and blockchain assets.
In September 2018 a number of working groups were established by the Cayman Islands Government to agree the broad parameters for a legislative approach for Cayman to adopt to promote and regulate emerging technologies including blockchain and digital assets. As part of that consultation, in November 2018 the Government announced that a technology neutral regulatory sandbox would be introduced in the Cayman Islands to encourage, foster and incubate companies operating in this fast moving sector. The Government has also confirmed that it is exploring how regulated digital identity solutions could help streamline and replace more traditional paper-based approaches to AML and KYC compliance. Further details on these initiatives are expected in spring 2019.
To give organisations in Cayman additional time to achieve compliance, the date on which Cayman’s Data Protection Law will come into full force has been put back to 30 September 2019. The Ombudsman, which will have responsibility for enforcing the new law, has recently published guidance to assist data controllers with their compliance obligations. The guidance can be found at https://ombudsman.ky/data-protection
British Virgin Islands
Following on from the welcome amends to BVI’s anti-money laundering policies in late 2018 to accommodate digital verification, the BVI remains an attractive jurisdiction for digital asset and blockchain-focused businesses, including digital exchanges. A regulatory sandbox remains under discussion between the government and the BVI Financial Services Commission and further guidance on both this and the use of digital assets more widely is expected in the coming months.
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