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Crypto companies flee US troubles to balmy Bermuda

The Bermuda Monetary Authority is Bermuda’s financial services regulator. The regulatory framework established in Bermuda for cryptocurrency has been described as among the most progressive in the world (File photograph)

Digital asset business publications are increasingly citing Bermuda‘s regulatory leadership, including articles this week pointing to the island as a viable home for cryptocurrency business.

One publication lauded the regulatory framework established in Bermuda for cryptocurrency as among the most progressive in the world.

The Cryptopolitan acknowledged that the 2018 Digital Asset Business Act established a comprehensive regulatory framework for digital assets, including cryptocurrencies.

Under DABA, digital asset businesses are required to register with the Bermuda Monetary Authority and comply with strict anti-money laundering and know-your-customer requirements.

The publication further noted that Bermuda, with its more accommodating digital asset framework, is rapidly emerging as a premier destination for crypto start-ups seeking a favourable regulatory environment and low-tax regime.

Article author Florence Muchai said recent developments, including the Bermuda Coinbase licence and the establishment of a dedicated blockchain task force here, have reinforced the island’s position as a hub for digital asset innovation.

Meanwhile, in NameCoin News, Sara Gillard said burdensome regulatory policies and restrictions are driving the crypto companies in the United States eastward towards Bermuda.

“However”, she concedes, “all said and done, in the case of companies inclined towards servicing US customers, this migration will only prove to be a short-term solution.

“As per the opinion of Bitstamp USA chief compliance officer Thomas Hook, it becomes necessary for crypto companies to carry out their operations from US soil and function in accordance with the country’s rules and regulations if their intention is to connect with the US market.”

But right now, Andrew Gordon, managing attorney at the Gordon Law Group, said, there is very little clarity in the US where the regulatory factors are concerned, and this is only helping to confuse crypto companies further and adding to their woes.

Ms Gillard writes: “Ever since Bermuda enacted its Digital Asset Business Act half a decade back, it has been involved in streamlining digital asset architecture.

“The act was instrumental in setting up a licensing body for issuing, as well as selling and redeeming digital assets.

“During this period, Bermuda has issued licences to a whole league of crypto companies on its soil.

“Some of the prime names include Block, along with its affiliate, Cash App, as well as Circle, which is based in Boston and the supplier of the USDC stablecoin.”

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Published May 16, 2023 at 7:59 am (Updated May 16, 2023 at 7:57 am)

Crypto companies flee US troubles to balmy Bermuda

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