Bermuda’s regulators “get it” when it comes to understanding the future of digital technologies and specifically fintech opportunities.

This was the view of Appleby partner Jerome Wilson during the opening day of the virtual Bermuda Tech Summit, hosted by the Bermuda Business Development Agency (BDA).

He was not the only one singing the praises of the BMA in recognition of its leadership and willingness to collaborate with clients who are developing new types of fintech business ventures.

A similar point emerged earlier during the discussion between David Burt, the Premier, and Forbes associate editor, crypto and blockchain, Michael del Castillo in their one on one.

During the session entitled “Transforming the Regulatory Landscape”, panellists explored how Bermuda is striking the right regulatory balance between innovation and customer protection, and creating the global model for how the new business can be appropriately regulated by a premier financial services jurisdiction.

The premise of the session is that new technology will only reach its full potential, and flourish, if sophisticated legislative structures and regulatory frameworks are put in place to support its development.

Mr Wilson outlined how the BMA approach was found to be refreshing for clients because it helped them to understand the need to truly explain the nuts and bolts of their applications.

He said: “The whole framework of Bermuda is set up so that we have a regulator very much invested in making this a premier jurisdiction for this space.

“We have so many clients who come back saying how they really enjoyed the conversation and the experience with the BMA team because of their approach.”

He said that it takes more than one interaction for clients to realise that they have to lay out their entire plan to regulators, and for them to learn the value in doing so.

Panel moderator Michelle Chivunga, founder/CEO/investor, Global Policy House, said it was appealing that the BMA was flexible enough that an applicant can walk through the process with it so that they can make necessary changes to get where they need to be.

Jeff Baron, chief compliance officer, Bittrex Global, said that there are three things necessary for success when getting a licence: a fintech-friendly government that is quite forward looking about this space; a premier regulated jurisdiction that is well regarded globally; and a capable, legitimate digital asset business.

The former government senator said that Bermuda has been a highly regulated jurisdiction with a number of financial service businesses, including ILS, insurance, banking and reinsurance.

“Our [Bittrex Global’s] experience has been very positive, and a steep learning curve,” he said.

“But achieving that regulatory clarity has been a great learning curve. And it has helped us grow quickly but safely.

“The regulators are responsive and informative and easy to work with, and frankly they help educate you along the way, because they are staffed up with subject matter experts in digital asset legislation, regulations and policy. You view them as capable partners who are helping, rather than someone who is checking up on your homework.”

Mr Baron said that not all companies are welcomed in Bermuda.

He went further: “If you are a business that does not put any time or effort into knowing your customer (KYC), or anti-money laundering policies and procedures; if you are a business that doesn’t even collect KYC documentation; if you are a business that has executives or board of directors who don’t know what your business risks are, and they can’t evidence that; if you don’t have robust cybersecurity, you will not get a licence in Bermuda. You won’t get a licence in any top-tier jurisdiction.”

Meanwhile, the electronics trading platform 24 Exchange was represented by CEO Dmitri Galinov, who said that key clients included global banks, hedge funds and asset managers.

From a foreign exchange background, crypto derivatives and other crypto capabilities have recently been added for the T-licensed organisation. Mr Galinov said that working with the BMA has been nothing but positive.

“I’ve worked with regulators for 20 years in the US and Asia, and our experience with the Bermuda Monetary Authority has been very smooth.

“Our clients like the solid regulatory process. Clients have comfort when they consider the thorough vetting required by the BMA.”

Mr Galinov mentioned other positives about the Bermuda jurisdiction including the favourable physical proximity to London and New York.

Aqsa Zubair, the BMA’s assistant director, fintech, said that there were critical issues facing the finance sector at the moment.

But she said: “We are constantly at a point where we need to balance consumer protection and market access in this sector. But this fine line is not unique to the crypto sector. We’re currently seeing it played out in retail investing.

“Our regulatory framework is very much risk-based and companies are required to be prudent in their operations. For example, this broad obligation can translate into consumer education on complex products so that consumers understand the risks in the products they are investing in, or the legal implications of running a global platform.

“There are also specific guidelines that we have, to ensure consumer protection, where warranted.

“So, for example, we have the companies dealing with digital asset custody. There is a code of practice that outlines measures for safeguards for custodians to take to ensure client assets are protected and that clients know what they are agreeing to.”