BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen
• a publisher issuing a token used exclusively within an online game platform, provided that notice is given to the BMA; • a person providing data storage or security services for a DAB, provided that notice is given to the BMA; • an undertaking providing digital asset busi - ness activity solely for the purpose of its busi - ness operations or the business operations of any group undertaking, provided that notice is given to the BMA; and • an investment fund that has appointed an investment manager that is licensed under the Investment Business Act 2003 (IBA) or authorised by a recognised regulator, pro - vided that notice is given to the BMA. Similarly, the BMA can grant an exemption or modification exempting a person conducting a digital asset business from the requirement to comply with any standard applicable to it or modify the same. This may be subject to speci - fied conditions. Licensing requirements There are three classes of licence available to persons conducting digital asset business activi - ties in or from Bermuda, as follows. • Class F licence – a Class F licence is a full licence to conduct specified digital asset business activities and is not subject to a specified period. However, the BMA has the discretion to place restrictions or conditions on a licence where they deem it appropriate in the circumstances. • Class M licence – a Class M licence is a mod - ified licence to conduct specified digital asset business activities, with modified restrictions and conditions. It is only valid for a specified period of time determined by the BMA.
• Class T licence – a Class T licence is designed to operate as a test licence for pilot or beta testing in relation to specified digi - tal asset business activities. Once the BMA considers that the business has successfully achieved its testing objectives, it will accept an application to upgrade the licence to a Class M or potentially Class F licence. Class T licences are more appropriate for start-ups, owing to the relaxed approach to the mini - mum licensing criteria. Minimum licensing criteria Schedule 1 of the DABA sets out the minimum criteria for licensing, as follows. • The controllers and officers of the licensed/ authorised entity must be fit and proper per - sons. • The licensed/authorised business must be conducted in a prudent manner. • The licensed/authorised business must be carried on with integrity and with the profes - sional skills appropriate to the nature and scale of its activities. • The licensed/authorised entity must imple - ment corporate governance policies and processes appropriate given the nature, size, complexity, and risk profile of the digital asset business activities (eg, a minimum of two persons to effectively direct the business and typically with at least one non-executive director). • The position of the licensed/authorised entity within a group structure will not obstruct the conduct of consolidated supervision by the BMA. Holders of a Class M or Class F licence must maintain a head office in Bermuda from which the business is managed and directed. Licensed persons must also demonstrate a cybersecuri -
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