BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
assets in a manner that recognises the unique factors of the technology, as opposed to seeking to fit the different types of digital assets within existing legal and regulatory definitions. However, this has not precluded the BMA from recognising and providing guidance to business - es utilising known-use cases for specific digital assets. In 2024, the BMA consulted industry stakeholders and published guidance specific to issuers of single currency pegged stablecoins (see 1.1 Evolution of the Fintech Market ). 10.4 Regulation of “Issuers” of Blockchain Assets Please refer to 2.2 Regulatory Regimes for the broad definition of “digital assets” in the DABA and the DAIA and their application to issuers. The DAIA requires regulatory permission to con - duct a digital asset issuance that is conducted for the purposes of raising funds for a specific project, whereas the DABA is a licensing regime focused on regulating digital asset issuances as a service and digital asset issuances that have an ongoing business element to them. 10.5 Regulation of Blockchain Asset Trading Platforms Blockchain asset trading platforms that are offered to the public and operate as “digital asset exchange” or “digital asset derivative exchange provider” (each as defined under the DABA) are regulated under the DABA as “digital asset busi- nesses” and must be licensed thereunder. Peer-to-peer trading, when conducted in a pro - prietary manner, is not specifically regulated. However, the DABA includes a broad spectrum of activities that might appear to be proprietary trading but – owing to the way in which they are conducted – are deemed to be digital asset
business activities, including the provision of intermediary services. The BMA applies a broad interpretation to the list of digital asset business activities contained in 2.2 Regulatory Regime and legal advice should be sought on any proposed digital asset transac - tion or activities in or from within Bermuda. Even if the transaction is intended to be proprietary in nature, there can be nuances to an arrangement that could bring the transaction within the scope of the DABA. 10.6 Staking Depending on the circumstances, the provision of staking services relating to digital assets may be caught under the DAB Regime. Staking ser - vices that involve conducting digital asset trans - actions on behalf of another person would, for example, be considered a digital asset business activity under the DABA. However, if the staking services are conducted in a proprietary manner, it is unlikely to be considered a regulated activity (see 10.5 Regulation of Blockchain Asset Trad- ing Platforms ). 10.7 Crypto-Related Lending The provision of lending services relating to digital assets is regulated in Bermuda. In 2023, operating as a digital asset lending and operat - ing as a digital asset purchase transaction ser - vice provider were added as separate regulated digital asset business activities under the DABA. The entity facilitating the digital asset lending, either as principal or agent (ie, the entity provid - ing the platform or avenue through which digital assets are loaned), is required to be licensed under the DABA. Similarly, in the context of traditional lending ser - vices, Bermuda also provides for a digital asset business bank licensing regime – under which, a
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