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Crypto firm Omega One approved for licence

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Omega One, an agency brokerage for cryptocurrencies, has been approved for a digital-asset business licence by the Bermuda Monetary Authority.

David Burt, the Premier, revealed the news in the House of Assembly on Friday and added that representatives of the company would be on the island this week.

Omega One was one of several fintech companies to sign a memorandum of understanding with the Bermuda Government last year.

Last May, the New York-based company pledged to open an office on the island and hire at least 20 Bermudians over a three-year period.

An agreement signed by Alex Gordon-Brander, chief executive officer of Omega One, and Mr Burt, also involves the company collaborating with the Government on developing a digital-asset custody union.

Omega One wants to work with insurers and the Government to help set up a business to securely hold and insure digital currencies on behalf of investors.

In the House on Friday, Mr Burt was pressed by Michael Dunkley, the One Bermuda Alliance MP and former premier, for a progress report on the MOUs signed with fintech firms Binance, Medici Ventures and Shyft last year.

“Binance came to Bermuda with the intention of setting up their global compliance operations, but they couldn't get banking services and so they went to jurisdictions where they could get them,” Mr Burt said.

“We have since been in contact with the principals of Binance and they have re-engaged and moved forward the application process with the Bermuda Monetary Authority.”

When Zhao Changpeng, the chief executive officer of Binance, visited Bermuda in April last year, he pledged that the company's compliance operation on the island would create 40 jobs.

Last month, Mr Burt announced that New York-based Signature Bank had agreed to provide US banking services for fintech firms licensed in Bermuda.

Local banks have lacked the risk appetite to deal with the fledgeling industry, creating a significant obstacle for fintech on the island.

Mr Burt added: “We are in constant touch with the principals of Binance and they are still committed to doing items in Bermuda once the banking issues are sorted.

“Binance has eighth most valuable cryptocurrency in the world and is building infrastructure in the industry. They are doing things in places where they could establish a banking relationship. That was our challenge.

“It is unfortunate that Bermuda lost out on the opportunity at the early stages, because our local banks were unwilling to come to the table to support this economic development.”

Mr Dunkley asked how much of the $10 million that Binance's charitable foundation pledged to spend on training for Bermudians in blockchain technology development had been spent.

Mr Burt responded by saying that no money had yet been paid into the Fintech Development Fund, but that as soon as it was, he would announce it.

In the case of Medici Ventures, a subsidiary and blockchain accelerator of that intends to build a business that will create 30 jobs in Bermuda, Mr Burt said that conversations were ongoing with Patrick Byrne, the founder of Overstock. Dr Byrne is also the brother of Mark Byrne, the former chairman of Flagstone Re and the Board of Education.

Medici has 19 portfolio companies, exploring the use of blockchain in many different areas, from wine and property, to a voting app and a lending company. The group is still far from profitable, having lost $39 million through the first nine months of last year.

But Dr Byrne is reportedly a “blockchain believer” and intends to sell Overstock's flagship online retail business and focus fully on blockchain businesses.

In an interview with the Coindesk website in January, Jonathan Johnson, president of Medici, said that if all goes to plan, the intended sale would leave the company with “Medici, its assets and a bag of cash”.

Medici's focus this year “should change from coming up with new ideas to executing on those ideas”, Mr Johnson added.

On the question of Shyft, Mr Burt said he had spoken with company representatives last week about the Government's digital identification scheme, being developed by Shyft in conjunction with Bermudian start-up Trunomi. The Cabinet had approved an item to move forward on this matter, the Premier added.

Shyft, a company with expertise in know-your-customer, anti-money laundering and blockchain-based identity verification, had pledged to invest up to $10 million in Bermuda over a three-year period in an MOU signed last May.

Green light: crytocurrency brokerage Omerga One has been approved for a digital-asset business licence
Hopeful signs: a fintech banking breakthrough has led to progress on Binance's efforts to set up its compliance operation on the island, says David Burt, the Premier

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Published March 11, 2019 at 9:00 am (Updated March 10, 2019 at 8:36 pm)

Crypto firm Omega One approved for licence

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