Category Archives: Bermuda

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Geographical Minnows in the Hunt for New Crypto Business

Many small countries with flexible regulatory guidelines towards cryptocurrencies and friendly banking rules are pulling some companies away from some of the more established “havens” such as Switzerland.

Many in the industry have recently expressed concerns that Switzerland may be losing its “crypto-haven” tag,  primarily because of current banking regulations in the alpine country. Thomas Moser, a board member of the Swiss National Bank, told Reuters recently that some fintech companies still had trouble opening accounts:

“They raised concerns about problems with opening bank accounts, which was a worry for them, and asked for help… I said this was not something the SNB dealt with, but they should speak with FINMA.”

This sounds like a less than genuine approach by the central bank as FINMA, the Swiss cryptocurrency-friendly regulatory body, continually has to deal with SWB’s continued concerns about money laundering.

Recent countries in the hunt for business are Liechtenstein and Gibraltar; elsewhere, the Cayman Islands and Bermuda are fast becoming start-up favorites, the latter recently when Bermuda shorts-wearing Changpeng Chao, CEO of Binance, announced he would open up compliance operations there and invest USD 15 million in the island.

Just in the last week, Bermuda’s Prime Minister David Burt, who also doubles as Minister of Finance, announced that 20 fintech companies had incorporated in Bermuda and another 21 were waiting in reserve. The list of 20 included Binance, Unikrn, iCash, Hub Culture, DES Digital Currency Exchange and Omega One with both Arbitrade Ltd and Arbitrade Mining (Bermuda) Ltd listed.

Bermuda has not only captured the world’s largest crypto company in Binance but, through its prime minister, has also expressed the desire “to position Bermuda as the incubator for this industry”, as Burt recently said at a New York blockchain conference.

The Rock of Gibraltar seems an unlikely place for a financial hub but nonetheless, it is, like Bermuda, fast becoming one, as it continues to lure new and existing fintech companies to its shores. Its second ‘Gibfin’ blockchain forum is on its way in September 2018, demonstrating the country’s serious intent when it comes to encouraging fintech companies to do business there.

Gibraltar is also about to finalize its cryptocurrency legislation which would allow companies to trade in digital currencies. Currently, 35 companies have applied for a government license.

Tiny Liechtenstein isn’t to be left behind either. The country’s proposed new Blockchain Law would take Liechtenstein down the “haven” route offering “crypto companies regulatory and legal predictability as well as enabling the country access to traditional fiat-based banking services”.

The law, originally scheduled for legislation on 10 July, is still on hold as the industry awaits further announcements later in the year.

Despite the obvious competition from these geographical minnows, Switzerland forges ahead regardless to become Europe’s cryptocurrency capital. Recent moves towards allowing cryptocurrency trading on its new SIX Digital Exchange is a clear notice of intent.


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Bermuda Prioritizes Blockchain Startups in Revised Banking Act

Bermudian officials led by premier and finance minister David Burt have voted to amend banking laws in favor of blockchain and fintech companies. These changes to the Banking Act follow closely the Digital Asset Business Act and an initial coin offering (ICO) bill recently passed by the Bermudian government.

A new class of banks

The changes to the Banking Act will create a new class of banks that will work specifically to cater to blockchain and fintech companies, combating the current dismissive nature of the banks.

The traditional financial sector in Bermuda has been unwilling to provide blockchain startups banking services, referring to legal and regulatory barriers as justification for this, prompting Burt to introduce these changes in support of economic growth.

He also noted that it is the lack of banking services for the industry that has presented the greatest challenge for growth in the sector globally, describing it as crucial for successful development.

Burt’s initiatives

Recent years have seen Burt firmly champion Bermuda as a blockchain friendly nation, earlier this year pushing for ICO regulations that would require the ministry of finance to approve each ICO before its launch.

Burt was last year responsible for creating a blockchain task force to ensure Bermuda was able to provide a hospitable environment for the sector to flourish, with regulatory and legal officials managing the force.

He was also responsible for the successful memorandum of understanding recently signed between Bermuda and the world’s largest cryptocurrency exchange, Binance.

The agreement saw the Binance Foundation offer to provide USD 10 million worth of university blockchain development and compliance training across the country, as well as the investment of USD 5 million in local blockchain companies.


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Bermuda Global Contender for Blockchain Startups, Pioneering Regulations

The island of Bermuda is positioning itself as a “global hub for fintech enterprises and innovation”, with the crypto-friendly regulation in place on the island attracting blockchain startups and companies in swathes.

The British Overseas Territory island in the North Atlantic Ocean is actively seeking to become a global leader in all things crypto and blockchain. In April 2018, cryptocurrency exchange giant Binance announced its partnership with the Bermuda government to establish a global compliance center.

The official Bermuda Business Development Agency (BDA) website reads: “Bermuda is embracing the blockchain revolution, and creating a robust and fit-for-purpose legal and regulatory framework governing initial coin and token offerings (ICOs) and virtual currency businesses.”

It goes on to invite fintech business and initial coin offerings (ICOs), offering full legal and advisory support and aid in bolstering enterprises presence in Bermuda.

In a press release on 14 May 2018, premier and finance minister David Burt led a 20-member delegation at Consensus 2018, the three-day conference in New York City. Bermuda reportedly received praise from international delegates at the event for its “pioneering work to regulate the blockchain industry”.

Bloomberg also reported that Omega One, a New York-based agency brokerage for cryptocurrencies was setting up an office in Bermuda. The company has desires to work with the government and insurers to “securely hold and insure digital currencies on behalf of investors”.

Alex Gordon-Brander, Omega One CEO, said, “All assets will be digital assets in a few years, and we need an on-ramp where the current legal form of the assets can reside… Bermuda has an incredibly strong legal, technical, reputational jurisdiction for financial services in general, but particularly for custody of assets and reinsurance.”

Bloomberg also noted in early May that Bermuda was drawing up the ‘Digital Asset Business Act’. The new law is designed to invite, encourage and regulate blockchain and cryptocurrency related businesses and investments. It is the second in a series of legislature moves to catalyze the growth of fintech in Bermuda; the first law-regulated ICOs.

Bermuda is looking like it will be contending with Switzerland, Gibraltar, and Malta to become the crypto paradise for startups and investors. These were recently ranked top three in a BlockShow rating study that ranked European countries based on ICO regulation laws, cryptocurrency laws, taxation frameworks and projects.


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Bermuda Pushes Ahead to Promote Cryptocurrency Growth

The Bermuda Monetary Authority (BMA) claims that it is seeking to develop a comprehensive framework that would offer cryptocurrency businesses a safer and more stable environment through new proposed legislation.

The authority claims that by seeking public feedback on proposed anti-money laundering laws designed to regulate domestic cryptocurrency activity, it will better be able to develop this framework and environment.

According to a report by the Royal Gazette on Thursday, Bermuda’s minister of national security Wayne Caines believed the industry needed well-rounded regulation before it could flourish. He maintained that the BMA had 20 companies in London waiting to do business, commenting that “it’s actually phenomenal”.

In a paper released on Thursday, Bermuda’s financial regulator said the proposed legislation – the Virtual Currency Act – would call for cryptocurrency exchanges, wallet services and new coin offerings to collect and keep records of their customers. Regulation of ICO organizers would not be part of the act as the aim is not prohibition, but development, said legislators. ICOs would fall under separate legislation.

The Caribbean and Bitcoin

Caribbean governments and businesses are showing increasing interest in currencies like Bitcoin. In recent years, due to slow growth and high debt rates, major US banks have become more reticent about doing business in the region, frequently withdrawing capital from Caribbean markets. This has created a deficit of banking services inciting local banks to engage in illegal activities such as facilitating money laundering.

The sluggish economy and the tourist industry on which it mostly survives need a boost, and Bitcoin is proposed by some as a way of energizing it. The Caribbean Tourism Organization plans to introduce cryptocurrency payments for tourist services and integrate Caribbean economies in the region through the use of virtual currencies.

“Tourism is the largest single contributor to the Caribbean economy. It is absolutely critical to every single Caribbean nation’s well-being and development. We see this as a very natural and necessary association,” said Rawdon Adams, CEO of blockchain payment startup Bitt.

There is enthusiasm for new technology among several Caribbean economies through the adoption of cryptocurrencies as the Eastern Caribbean bank considers its own currency, the Digital Eastern Caribbean Dollar (DXCD), with eight governments and economies behind the project.

It is unclear if Bermuda would be able to sign up for the region’s digital currency as it is not officially listed as a Caribbean island due to its location in the Sargasso Sea.


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