A move toward ICO regulation is underway in Bermuda, the premier of the British Overseas Territory said last Friday.
David Burt, who is also the minister of finance, provided an overview of a draft bill to the parliament's House of Assembly, saying that legislators will take a "measured approach" to regulating the crypto industry in order to make the island "a global leader in the fintech space."
"Bermuda has an opportunity to become a global leader in the Fintech space by being one of the first countries in the world to specifically regulate ICOs," he said, adding:
"The proposed regulatory framework will provide legal certainty to companies looking to conduct ICOs in Bermuda."
The proposed bill would designate ICOs as "restricted business activities," and would require issuers to obtain consent from the minister of finance before starting operations.
Burt said the application process would require the disclosure of information about the company, the digital asset being issued and "the rights of the purchaser to assist the public in making informed decisions about participating in any proposed ICO."
Wayne Caines, Bermuda's minister of national security, will lead the legislative initiative. The government has also formed a Legal and Regulatory Working Group that includes MP Michael Scott, who was previously the island's attorney general, officials from the Ministry of Economic Development and Tourism and the Ministry of Finance, and individuals from private sector banking and legal institutions.
Bermuda's proposed ICO legislation will not be a wholly new regulatory framework, the premier explained, and instead will take the form of amendments to the Companies Act 1981 and the Limited Liability Company Act 2016. Likewise, other existing legislation will continue to apply to ICOs where appropriate, including securities laws.
The government is also consulting with the Bermudan Monetary Authority on additional legislation dealing with digital asset companies.
By creating an environment of regulatory certainty for ICO issuers, Burt said, Bermuda could reap a range of economic benefits, including the migration of new companies, jobs and capital to the island, as well as additional government revenues.
Implementing ICO rules would also reduce the risk of cryptocurrencies being used for "cybercrime, consumer fraud, money laundering and terrorist financing," he said.
The draft bill is expected to circulate soon, and following a consultation period, will be passed to parliament for deliberation "at the earliest opportunity."
Bermuda has been involved in the crypto space since 2017 when it launched a blockchain task force. In January of this year, Burt said at the World Economic Forum that Bermuda may use the blockchain to revamp its property deeds system.
Bermuda Parliament image via Shutterstock