BERMUDA Law and Practice Contributed by: Bourn Collier and Sharon A. Beesley, BeesMont Law Limited
to segregate client assets under Sections 17 and 18 of DABA. Wind-Down Plan Wind-down plans have become a key pillar of Ber- muda’s DABA regime. As set out in the BMA’s Guid- ance for Prospective Applicants, DABA licensees are required to submit wind-down plans for their opera- tions as part of licensing. For Class T and Class M licensees, wind-down plans may be conceptual in nature, outlining the general approach to orderly cessation if testing or development goals are not achieved. Class F plans are expected to be more detailed and operationally focused, addressing triggering events, the resources required (financial, human and techno- logical), the operational sequence, timelines, costs, client asset protection, data retention, contractual obligations, and stakeholder communications. Case Law Including Cross-Border Co-Operation Bermuda now has substantive case law on the wind- ing-up of digital asset businesses, following the liqui- dations of two Class F DABA licensees in In the Mat- ter of Bittrex Global ( Bermuda ) Limited (in Liquidation) (2025) SC (Bda) 78 Civ (Martin J), affirmed in Bittrex Global Inc v Howie and others (2026) CA (Bda) 1 Civ, and In the Matter of BlockFi International Limited (in Liquidation) and In the Matter of the B Trust (2025) SC (Bda) 110 Civ (Martin J), as mentioned earlier. The BlockFi liquidation also stands as the first report- ed Bermuda example of a successful cross-border resolution of a digital asset business, conducted as an ancillary proceeding to Chapter 11 proceedings in the US Bankruptcy Court for the District of New Jersey. Together, the cases establish key principles in the insolvency of DABA licensees, including “custody” in Section 18 of DABA is to be construed broadly and purposively (in a control-based test), while any attempts to circumvent the statutory regime through contractual drafting will not succeed. Insolvency Mechanisms Bermuda is a long-established financial centre with a sophisticated body of insolvency law, and the mecha-
nisms available on the insolvency of a DABA or DAIA licensee depend on the corporate form of the licensee. DABA licensees are typically incorporated as Bermu- da exempted companies limited by shares, in respect of which the winding-up provisions of the Companies Act 1981 apply, with proceedings supervised by the Supreme Court of Bermuda under the Companies (Winding-Up) Rules 1982; alternative forms (including Incorporated Segregated Accounts Companies under the ISAC Act 2019, Segregated Accounts Companies under the SAC Act 2000, and limited liability compa- nies under the Limited Liability Company Act 2016) carry their own statutory insolvency overlays. Bankruptcy Remoteness To protect client assets against bankruptcy, the BMA recommends applicants implement, where appropri- ate, limited recourse structures such as Incorporated Segregated Accounts Companies (ISACs), Segre- gated Accounts Companies (SACs), Special Purpose Vehicles (SPVs), trust arrangements, or other struc- tures that demonstrably insulate tokenholders’ inter- ests from claims against the issuer or originator of the underlying assets. 1.2.6 Industry and Trade Bodies See 1.1.5 Industry and Trade Bodies . 2. Regulation 2.1 Regulators and International Alignment The Bermuda Monetary Authority is the sole financial regulator in Bermuda and is entirely responsible for the regulation of digital asset firms in Bermuda. The BMA as a regulator engages regularly with peer regulators and fellow international standard-setting bodies. It is a signatory to the IOSCO Multilateral Mem- orandum of Understanding (for securities matters), the IAIS Multilateral Memorandum of Understanding (for insurance), and a network of bilateral memoranda of understanding with overseas regulators. Bermuda’s anti-money-laundering and counter-ter- rorist-financing co-operation framework is led by the National Anti-Money Laundering Committee (NAM-
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