Regulation Of Virtual Currency Business Paper

April 16, 2018 | 15 Comments

The Bermuda Monetary Authority [BMA] released a 150-page consultation paper on the ‘regulation of virtual currency business’ with the paper’s stated objective to provide outline for the e”ffective regulation of service providers within the virtual currency business industry” in Bermuda.

The paper notes, “Much of the virtual currency sector remains unregulated in most jurisdictions so Bermuda will be one of the trailblazers, implementing a dedicated comprehensive virtual currency prudential and AML/ATF regulatory framework.”

“It is intended that VCBs be regulated under a new Virtual Currency Business Act 2018 [VCBA or the Act], underpinned as needed by Rules, Regulations, Codes of Practice, Statements of Principles and Guidance similar to the legislative frameworks in place for other financial services regulated by the Authority.”

On Friday, the Companies and Limited Liability Company [Initial Coin Offering] Act was tabled in Parliament, with the Bill aiming to ensure Initial Coin Offering [ICO] are treated as a restricted business activity that will require consent.

Speaking on Friday, Minister of National Security Wayne Caines said “the emergence of new financial products and services created through the use of technology has opened new and exciting opportunities for entrepreneurs and businesses. So we consider this to be landmark legislation for Bermuda, and in that regard, this is a very exciting time for this Government.

“By being one of the few countries in the world to specifically regulate ICOs, we believe that the proposed regulatory framework will provide legal certainty to companies looking to conduct ICOs in Bermuda.”

The Minister noted that the next Bill to be tabled will be the Virtual Currency Business Act, which “will set the regulatory infrastructure to govern Virtual Currency Digital asset Exchanges.”

The full Consultation Paper details follow below [PDF here]:

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Comments (15)

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  1. Bermewjan says:

    Idiots.

    • Come correct says:

      Care to quantify that statement? Or is this just ignorance? I wonder…..

  2. Stinky D. says:

    Are the banks going to accept the new crypto currency

    • shrew says:

      No. Retail banks will accept accounts for pot dispensaries before cryptos any day.

  3. Joe Bloggs says:

    First, according to the Minister, the regulation is only in relation to the “initial” coin offering. The very next day the regulation will fall away and Bermuda is at risk of being seen to promote something that is then unregulated.

    Second, once again I ask who will be the regulator? The BMA? The Regulatory Authority? The Minister personally or his puppet Casino Gaming Commission?

  4. Do Right says:

    First to Market will mean first to be a target in my opinion. Why? This is not a market-friendly framework, and is more satisfactory for rule-makers.It is impossible to disrupt the status quo if the rules to compete are in support of the same status quo. Plus, it appears that some of the people serving on the Government’s committee have used it as an opportunity to position their private business ventures. These just so happen to be promoted by the Minister which is not a positive look. FYI, the serious, heavy-hitting players in this space are persons who are adverse towards anything that resembles Government favoritism or interference of any kind.

  5. Mike's Boo says:

    First to Market will mean first to be a target in my opinion. Why? This is not a market-friendly framework, and is more satisfactory for rule-makers.It is impossible to disrupt the status quo if the rules to compete are in support of the same status quo. Plus, it appears that some of the people serving on the Government’s committee have used it as an opportunity to position their private business ventures. These just so happen to be promoted by the Minister which is not a positive look. FYI, the serious, heavy-hitting players in this space are persons who are adverse towards anything that resembles Government favoritism or interference of any kind.

  6. The Original Truth™ says:

    BMA need to take the advice from the owner of Berkshire Hathaway not these no name prophets. Warren Buffett says, “In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,”

    ICO stands for initial coin offering, meaning all ICOs are forms of this monopoly money they call cryptocurrencies. Shame on BMA for not shutting these ponzi schemes down in Bermuda. They are trying to regulate something that can’t be regulated. Bermudians who invest in these will become bagholders. Google doesn’t want to touch them, so why is BMA?

    https://www.theguardian.com/technology/2018/mar/14/google-bans-bitcoin-adverts-cryptocurrency-crackdown

  7. Claire says:

    Please, everyone, go read about cryptocurrencies before making nonsensical comments about this new legislation. We really do need to debate the opportunities and risks of pursuing cryptocurrencies, ICOs, etc, as an economic policy, but the debate is only helpful if we first educate ourselves about the topic.

    • Anbu says:

      Tell that to government. They cant even regulate a dam bus schedule. What makes you think they arent going to jack this up too?

    • The Original Truth™ says:

      Reading bout them does nothing because until you invest in it you can’t realize the lost cost. There are very little opportunities in crypto and ico and many risks. The only legislation needed is to BAN THEM. Most are ponzi schemes without any tangible assets. There’s far and few places that will accept them because their value exist in a bubble and do not represent real currency values. Blockchain companies are a safer investment than cryptos and ICO. I bet there isn’t anyone who can give me a breakdown of the fundamentals of any cryptos or ICO because they don’t have fundamentals. It’s all a scam and I have found that out by testing it myself regardless of anyone else’s view. I’m glad I only put as much as I’m willing to gamble with because I doubt I will ever get anything back. There’s hardly anywhere to cash in and the sites that allow you to redeem are a trap since you can only redeem if you have a minimum of $500 already invested.

      • clearasmud says:

        ” I’m glad I only put as much as I’m willing to gamble with because I doubt I will ever get anything back. ”
        That should be the case whatever you are investing your money in as there is “never” a guarantee of a return!

  8. northrock says:

    “… but the debate is only helpful if we first educate ourselves about the topic.”

    Should have started that long ago, on every topic.

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