The dynamics of the understanding of cryptocurrencies forces us to rethink many factors regarding what should be regulated and how. Certainly in the middle of a moment when various countries are just entering into regulatory matters regarding cryptocurrencies, Bermuda is taking decisive steps in its plans to adopt a cryptographic regulation appropriate to its local reality.
The previous work for the elaboration of the bill that would regulate the activity related to cryptocurrencies in Bermuda, has consisted of a study conducted by the Monetary Authority of Bermuda (BMA), specifically on the law against money laundering that aims to Organize their local cryptocurrency industry.
Waine Caines, the Bermuda Minister of National Security has tabled a framework for a legislative act that aims to regulate initial coin offerings in the country. The Companies and Limited Liability Company (Initial Coin Offering) Act is a proposition to regard ICOs as a restricted area that requires the approval of the minister of finance before entities are permitted to launch them.
Details of the Act shows that before a company can get the required consent:
- They most show evidence that they have been duly registered to operate in Bermuda.
- They must show what the project is about, the product or service they render and if it is a product in development, show the timetable required completing its development.
- The company also shall clearly indicate the amount it plans to raise through the crowdsale. This should specify the soft cap and hard cap.
- Features, functionality and how the token could be transferred from person to person, the right of ownership and legal coverage the holder has must be specified.
- The technology the team would use in developing the product or service as well as evidence that it has the requisite ability to develop such product must be obvious.
- They must confirm the identities of every purchaser of the token and create an accessible database of such information.
- They must comply with other existing rules of auditing of all ICO transactions.
The minister said the effort is a landmark legislation that would enable Bermuda take advantage of a new technology that has great potentials for entrepreneurs and businesses. He said that the government of Bermuda wants to make the country a fintech haven and the blockchain technology is one avenue through which they will accomplish that.
The Bermuda authorities are looking to develop an ecosystem that can attract blockchain related companies to operate from that country safely. The regulatory body has already indicated its determination to help the bill cover activities related to virtual currencies.
The regulatory framework would cover everything from digital currency exchanges, to token-generating activities, and ICOs, with the appropriate know-your-customer (KYC) protocols. They want to use the KYC rule to combat all forms of illegal activities related to cryptographic activity, for the good of all. Although anonymity is affected, it is true that this rule contributes to providing greater security for users by preventing criminals from operating in the shadows.
It is important to highlight the Bermuda authorities are aware of the importance of the incentive of blockchain companies in their country, and the natural benefits of promoting a secure cryptography boom there. In no case do they aim to stifle the growth of the industry that revolves around the blockchain activity.
The Minister of National Security of Bermuda, Wayne Caines told a local media in the past days that many crypto-investors would be interested in establishing their base of operations in that country and that therefore it is healthy to regulate the entire ecosystem to ensure that everything works well.
A correct incentive policy would be based on implementing a scheme of operating licenses to blockchain startups and cryptocurrencies, making them work under the parameters of the law. With an adequate environment, the attraction of projects based on ICOs would experience significant growth, and an adoption of this country as a base of operations for secure blockchain companies would be the goal to be achieved by the Bermuda authorities.
It’s about understanding the importance of attracting capital to Bermuda with all that it means: new career opportunities, employment and training for Bermudans, additional income from taxes and related, and a foundation for a prosperous future like an innovative international business center.
Bermuda with all this would become a point of reference and entry for fintech firms, blockchain projects, ICOs and all businesses related to cryptography. This scenario could significantly improve the economy of that country.