BERMUDA Law and Practice Contributed by: Bourn Collier and Sharon A. Beesley, BeesMont Law Limited
ket maker for digital assets or operates as a digital asset benchmark administrator), where: (a) a “market maker” includes any operator who is: (i) fulfilling digital asset trade orders initiated by, or in response to, clients’ requests for trades; or (ii) hedging positions arising from quoting trade prices or fulfilling trade orders of digital assets; and (b) a “digital asset benchmark administrator” includes any person that has control over the provision of a digital asset benchmark including administering the arrangements for determining a benchmark, collecting, analysing or process- ing input data for the purpose of determining a benchmark, and determining a benchmark through the application of a formula or other method of calculation or by an assessment of input data provided for that purpose. • Lending and Staking – operating as a digital asset lending or digital asset repurchase transactions service provider (a person facilitating transactions by which a counterparty transfers or lends digital assets to a borrower subject to a commitment that the borrower will return equivalent digital asset with or without interest or premium on a future date; or when requested to do so by the lender or transac- tions governed by an agreement by which a coun- terparty transfers digital assets to a counterparty subject to a commitment to repurchase them or substituted digital assets of the same description at a specified price with or without premium, on a future date specified, or to be specified from that counterparty either as principal or agent). Persons who are exempt from requiring a DABA licence are as follows. • Affinity or rewards programme – a person provid- ing an affinity or rewards programme, where value is granted as part of such programme, which value cannot be taken from or exchanged with the person for legal tender, bank credit or any digital asset. • In-game asset – a publisher issuing, either them- selves or via another person on their behalf, a digital representation of value, which is used
exclusively within an online game, game platform, or family of games sold by the same publisher or offered on the same game platform. • Data storage/security services – a person providing data storage or security services for a digital asset business, but is not otherwise engaged in digital asset business activity on behalf of other persons. • Group services – an undertaking providing any digital asset business activity solely for the purpose of its business operations or the business opera- tions of any group undertaking. • Investment Fund – where an investment fund has appointed an investment manager that is licensed under the Investment Business Act 2003; or authorised by a recognised regulator, as such term is defined under Section 2 of the Investment Business Act 2003 – although note the ancillary business exemption in respect of the investment manager discussed below. Each of the above are referred to as “non-specified persons”. • Government bodies – the BMA, the government of Bermuda and any entity owned by it as well as a public authority, each of which are “specified persons”. Each exempt undertaking is required to notify the BMA of its intention to be exempt (and file an annual declaration of continuation of exemption each year). For DAIA, a single digital asset issuance activity is regulated, which is defined as an offer to the public to acquire digital assets or to enter into an agreement to acquire digital assets at a future date. The follow- ing types of digital asset issuance are exempt from requiring BMA authorisation: • offers which the board considers will result in the digital assets becoming available to not more than 150 persons; • an offer to “qualified acquirers” (defined in DAIA including high-net-worth/income individuals, types of businesses with a minimum of total assets or shareholders who qualify); and • an offer which the board considers will result only in persons acquiring being institutional investors
88 CHAMBERS.COM
Powered by FlippingBook