BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
• digital asset lending or repurchase transac - tion service providers and yield platforms; • investment funds, fund managers and fund administrators using digital assets; • digital asset banks; and • innovative insurers and insurance interme - diaries (such as marketplace providers or managers). 2.2 Regulatory Regime DABA The DABA imposes a licensing requirement on any person carrying out digital asset business. It sets out the criteria a person must meet to obtain a licence, the applicable continuing obli - gations thereunder, and the supervisory and enforcement powers of the BMA. The DABA applies to any entity incorporated or formed in Bermuda that carries out digital asset business, as well as any entity incorporated or formed outside Bermuda that carries out digital asset business in or from within Bermuda. The term “digital asset” is defined in the DABA (and has the same meaning for the purpose of the DAIA) as “anything that exists in binary format and comes with the right to use it and includes a digital representation of value that is: • used as a medium of exchange, unit of account, or store of value and is not legal tender, whether or not denominated in legal tender; • intended to represent assets such as debt or equity in the promoter; • otherwise intended to represent any assets or rights associated with such assets; or • intended to provide access to an application or service or product by means of distributed ledger technology” .
The “digital asset business” activities regulated by the DABA are: • issuing, selling or redeeming virtual coins, tokens or any other form of digital asset – this is intended to regulate any person provid - ing these services to other persons, whether such person is situated in or outside Ber - muda; • operating as a payment service provider busi - ness utilising digital assets, which includes the provision of services for the transfer of funds; • operating as a digital assets exchange; • carrying out digital asset trust services; • providing custodial wallet services; • operating as a digital assets derivative exchange provider; • operating as a digital asset services vendor; and • operating as a digital asset lending or digital asset repurchase transactions service pro - vider. Exemptions The Minister of Finance, acting on the advice of the BMA, can issue an exemption order under the DABA that grants a specified person – or a person that falls within a specified class – exemption from having to obtain a licence under the DABA. In 2023, the Bermuda government issued an exemption order excluding the follow - ing persons from registration under the DABA: • the BMA; • the Bermuda government and any entity owned by it; • any public authority; • a person providing an affinity or rewards programme, provided that notice is given to the BMA;
85
CHAMBERS.COM
Powered by FlippingBook