Fintech 2025

BERMUDA Law and Practice Contributed by: Steven Rees Davies, Kyle Masters, Charissa Ball and Alexandra Fox, Carey Olsen

ty programme commensurate with the nature, size and complexity of the digital asset business activities. The business must also file an annual comprehensive cybersecurity report prepared by its chief information security officer that assess - es the availability, functionality and integrity of its electronic systems in each case; this is reviewed and subject to an external audit. In 2023, the BMA issued the Digital Asset Busi - ness (Cyber Risk) Rules 2023, which replaced the Digital Asset Business (Cybersecurity) Rules 2018. It requires Class F licence holders to file cyber-risk returns with the BMA on an annual basis. Class M and Class T licence holders will be required to make such filing as often as pre - scribed by the BMA. DAIA The DAIA applies to any undertaking incorpo - rated or formed in or outside Bermuda that con - ducts any digital asset issuance in or from within Bermuda. The BMA has issued the Digital Asset Issuance Rules 2020, which expand upon the requirements under the DAIA. “digital asset issuance” is an offer to the public, or any section of the public, to acquire digital assets or to enter into an agreement to acquire digital assets at a future date. Any undertaking seeking to conduct a digital asset issuance must obtain prior authorisation from the BMA. Although issuers of digital assets may be reg - ulated under the DABA, which regulates the business of issuing, selling or redeeming digital assets in general, those intending to issue digital assets as a means to raise capital or fund pro - jects would fall under the DAIA. Those intend - ing to issue, sell or redeem digital assets as a business (eg, continuously with the intention to capture a profit) would fall under the DABA. The

DAIA grants the BMA wide-ranging powers of supervision and enforcement similar to those granted under the DABA. Exemptions Prior authorisation under the DAIA is not required if: • the issuance will result in digital assets becoming available to fewer than 150 per - sons; • the issuance is only to “qualified acquirers” (as defined in the DAIA); or • the issuance is only to persons whose ordinary business involves the acquisition, disposal or holding of digital assets. Although prior authorisation is not required, before any such transaction, an issuer or pro - moter must file a digital asset placement decla - ration form with the BMA. Minimum authorisation requirements The BMA may not authorise an undertaking to conduct a digital asset issuance unless it is sat - isfied that the undertaking fulfils certain mini - mum criteria set out in the DAIA. These authori - sation criteria are substantially the same as the minimum licensing criteria under the DABA (see “DABA (Minimum licensing critiera)” ). Issuance document The DAIA requires any person conducting a digi - tal asset issuance to publish and file an issuance document with the BMA, unless the digital asset issuance falls within an exemption. The follow - ing are examples of information that must be included in the issuance document: • details of all persons involved with the issuance(s), including the applicants direc - tors, chief executives, senior executives,

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