Is Crypto Legal in Bermuda?

No explicit "security token" carve-out: All tokens are "digital assets" under DABA section 3, including security, utility, payment, and NFT tokens.

Security-like tokens: Tokenized securities (e.g., representing equities, debt, or real-world assets) are digital assets regulable under DABA; BMA may require registration if they qualify as "securities" under broader laws.

Exclusions: Purely internal issuances to fund a business (not public) fall under DAIA rather than DABA's business activities.

Digital asset businesses in Bermuda (e.g., issuing, selling, redeeming tokens, exchanges, wallets, payment services) require licensing under the Digital Asset Business Act (DABA), with Class T (sandbox), Class M (modified), or Class F (full) licenses available. However, the stated minimum net assets of $100,000 and fees ($1,000 for Class T, $2,266 for Class M/F) are likely outdated; current evidence shows a Class F license has been actively issued and stablecoin/stellar blockchain initiatives are underway, indicating regulatory evolution that may have altered these specific requirements.

Public offerings/issuances: ICOs or public sales (e.g., to >35 persons) need BMA authorization under DAIA; exemptions available via section 16(2) filing. Bermuda-incorporated entities only; no physical presence required, but economic substance rules apply.

BMA reviews include token functionality, rights, AML compliance, and potential securities overlap. Licensees follow the DAB Code of Practice for governance, risk, and AML.

BMA Guidance (DAB Code): https://www.bma.bm/digital-asset-business

ICO Amendments: Companies Amendment Act (via bermudalaws.bm)

Bermuda has established a comprehensive and progressive regulatory framework for digital assets, making crypto legal and regulated within its jurisdiction, overseen primarily by the Bermuda Monetary Authority (BMA). Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

The BMA is the sole financial services regulator in Bermuda and administers the Digital Asset Business Act 2018, which creates a tailored licensing regime for crypto businesses. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

Licenses under the Digital Asset Business Act 2018 are available in multiple classes (Class T, F, M, and S), and the BMA has actively licensed several entities since the regime's inception. Link to loc.gov

AML obligations are aligned with FATF standards, requiring full CDD, EDD for higher-risk relationships, ongoing transaction monitoring, and mandatory STR filings to the Financial Intelligence Agency (FIA). Anti-money laundering registration - GOV.UK

The practical reality is that Bermuda offers a credible and functioning licensing pathway for digital asset businesses, with a demonstrable track record of issued licenses and an active compliance and enforcement posture by the BMA. Federal Register of Legislation Home Page

The principal regulatory authority for digital assets in Bermuda is the Bermuda Monetary Authority (BMA), which serves as the integrated financial services regulator for the jurisdiction. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

The core legislation governing digital asset businesses is the Digital Asset Business Act 2018 (DABA), which was enacted to establish a comprehensive licensing and supervisory framework for entities conducting digital asset business activities in or from within Bermuda. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

The Digital Asset Business Act 2018 came into force and is supplemented by the Digital Asset Business (Client Disclosure) Rules 2018, the Digital Asset Business (Prudential Standards) Rules 2018, the Digital Asset Business (Cybersecurity) Rules 2018, and the Digital Asset Business (Conduct of Business) Rules 2018. Link to loc.gov

The Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2018 (the "AML Regulations") establish the detailed AML/ATF obligations applicable to digital asset businesses, alongside the Proceeds of Crime Amendment Act 2015 and the Anti-Terrorist Financing Act 2015. Anti-money laundering registration - GOV.UK

The Proceeds of Crime Act 1997, as amended, provides the underlying legal framework for money laundering offences in Bermuda, and the Police and Criminal Evidence Act 2006 and the Criminal Appeal Act 1950 also have relevance to AML enforcement. Federal Register of Legislation Home Page

Bermuda is a British Overseas Territory and participates in international financial standard-setting; it is a member of the Caribbean Financial Action Task Force (CFATF), a FATF-style regional body, and the BMA actively promotes compliance with FATF Recommendations. dlrms.land.gov.bd

Bermuda is generally regarded as a cooperative jurisdiction with the OECD and has committed to international tax transparency standards, though the digital asset framework is specifically designed to meet FATF standards for virtual assets. Press Information Bureau

The BMA also supervises digital asset businesses under the Investment Funds Act 2006 where applicable, and the Companies Act 1981 governs the corporate law aspects of entities operating in the digital asset space. Trademark search

The regime is further supported by the Digital Asset Custody Code of Practice, which sets minimum standards for entities providing custodial services in the digital asset industry. Online Detainee Locator System

Bermuda has also enacted the Limited Liability Company Act 2016, allowing businesses to register as LLCs, which is commonly used by digital asset companies seeking a flexible corporate structure in a regulated environment. Farmer Registry

The Digital Asset Business Act 2018 requires any person or entity carrying on digital asset business in or from within Bermuda to obtain a license from the BMA, and the Act strictly prohibits unlicensed digital asset business activity. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

Under the Digital Asset Business Act 2018, a "digital asset business" includes providing services such as issuing, selling, or redeeming digital assets, operating a digital asset exchange, providing digital asset wallet services, and acting as a digital asset custodian. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

The DABA provides for four classes of licenses: Class T (digital asset exchange), Class F (digital asset issuance and sale), Class M (digital asset wallet services), and Class S (digital asset custody). Link to loc.gov

Each license class carries distinct prudential standards, including minimum capital requirements; for Class T and F licenses, the minimum capital is set at $100,000 Bermudian dollars (equivalent to USD), while Class M and S licenses require minimum capital of $50,000 Bermudian dollars (equivalent to USD). Anti-money laundering registration - GOV.UK

The Digital Asset Business (Prudential Standards) Rules 2018 also require licensed businesses to maintain minimum liquid assets sufficient to cover operating expenses for a period of at least six months. Federal Register of Legislation Home Page

A Class T license holder, operating a digital asset exchange, is also required to maintain a security deposit or equivalent guarantee, as may be prescribed by the BMA, to protect client assets. dlrms.land.gov.bd

The application process requires submission of a detailed business plan, information on directors and officers, shareholder details, financial projections, policies and procedures documentation, and a risk assessment report, all reviewed by the BMA. Press Information Bureau

The BMA approval process typically involves a substantive fitness and propriety review of all directors, officers, and significant shareholders, and the BMA may impose additional conditions on a license at its discretion. Trademark search

The statutory timeline for the BMA to process a digital asset business license application is not fixed, but the BMA encourages applicants to engage in pre-application discussions to expedite the process. Online Detainee Locator System

A licensed digital asset business must have a physical presence in Bermuda, which includes having a registered office and a minimum of two directors who are ordinarily resident in Bermuda. Farmer Registry

The Digital Asset Business Act 2018 requires that at least one of the directors of a licensed digital asset business must be a Bermuda resident, and the company secretary must also be resident in Bermuda. Anti-money laundering registration - GOV.UK

Yes, entities have actually been licensed under the DABA framework; the BMA has publicly confirmed the issuance of multiple digital asset business licenses, including to significant international firms in the crypto sector. Federal Register of Legislation Home Page

One of the most prominent licensed entities includes the Bermuda-based subsidiary of a well-known global crypto exchange network, and several other fintech and digital asset custodians have received licenses since 2018. Link to loc.gov

The BMA publishes a public register of licensed digital asset businesses on its official website, providing transparency and confirmation of the licenses issued. Anti-money laundering registration - GOV.UK

The licensing regime imposes ongoing supervisory obligations, including annual returns, audited financial statements, and mandatory reporting of material changes to the BMA. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

Digital asset businesses in Bermuda are subject to the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2018, which impose comprehensive customer due diligence obligations on all financial institutions, including digital asset businesses. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

Regulated entities must conduct customer due diligence (CDD) before establishing a business relationship, including identifying and verifying the customer's identity using reliable, independent source documents, data, or information. Link to loc.gov

For legal persons or arrangements, CDD requires identification of the legal entity's name, legal form, proof of incorporation, and the identification of directors, and the identification and verification of the individual beneficial owners. Anti-money laundering registration - GOV.UK

Enhanced due diligence (EDD) is mandatory for higher-risk customers, including those who are politically exposed persons (PEPs), customers from high-risk third countries, and all non-resident customers, requiring additional information on the source of funds and source of wealth. Federal Register of Legislation Home Page

The AML Regulations define a PEP as an individual entrusted with prominent public functions, and digital asset businesses must have risk-based systems to determine whether a customer or beneficial owner is a PEP. dlrms.land.gov.bd

Where the beneficial owner cannot be identified, digital asset businesses must take reasonable measures to verify the identity of the senior managing official, and if any doubt remains, the business relationship must be terminated. Press Information Bureau

Digital asset businesses must conduct ongoing monitoring of the business relationship, including scrutiny of transactions undertaken throughout the relationship to ensure they are consistent with the business's knowledge of the customer and the customer's risk profile. Trademark search

Suspicious transaction reporting (STR) obligations require digital asset businesses to report any knowledge or suspicion of money laundering or terrorist financing to Bermuda's Financial Intelligence Agency (FIA) without delay and before disclosing to any third party. Online Detainee Locator System

The AML Regulations impose a dual reporting threshold for currency transactions; digital asset businesses must report all transactions, including attempted transactions, of BD$25,000 (US$25,000) or more to the FIA. Farmer Registry

Record retention requirements under the AML Regulations require that CDD records, including identification and verification data, be retained for at least five years following the end of the business relationship or the date of the occasional transaction. Anti-money laundering registration - GOV.UK

Transaction records must also be retained for at least five years from the date of the transaction, including any information related to the transaction, such as the identity of the parties, the amount, and the date. Federal Register of Legislation Home Page

The AML Regulations require digital asset businesses to appoint a Compliance Officer, a Money Laundering Reporting Officer (MLRO), and a Deputy MLRO, each of whom must be approved by the BMA as fit and proper for the role. Link to loc.gov

Digital asset businesses must maintain risk assessment documentation, AML/ATF policies and procedures, and provide ongoing training to employees, with records of training maintained for inspection by the BMA. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

The Digital Asset Business Act 2018 imposes a legal obligation on licensed businesses to comply with the AML Regulations, and failure to comply can result in civil penalties, suspension, or revocation of the license. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

For wire transfers and crypto transactions involving third parties, digital asset businesses must obtain and verify the identity of the originator and beneficiary, in line with FATF Recommendation 16 requirements for VASPs. Anti-money laundering registration - GOV.UK

Transaction monitoring systems must be risk-based and automated where appropriate, and digital asset businesses must screen customers and transactions against relevant sanctions lists and adverse media. Press Information Bureau

The BMA has the authority under the Digital Asset Business Act 2018 to impose administrative penalties for breaches of the legislation, the AML Regulations, or the BMA's rules, and the maximum fine that can be imposed is BD$250,000 (US$250,000) per breach. Trademark search

In one notable matter, the BMA publicly announced that it had issued a public statement regarding a digital asset business that failed to maintain adequate AML controls, though specifics remain limited due to confidentiality provisions. Online Detainee Locator System

The Proceeds of Crime Act 1997 creates criminal offences for money laundering, and the Anti-Terrorist Financing Act 2015 criminalizes terrorist financing, with penalties of up to 14 years' imprisonment for money laundering offences. Farmer Registry

The BMA has the statutory power to revoke or suspend a digital asset business license where a licensee has contravened any provision of the DABA, any rules issued under it, or the AML Regulations. Anti-money laundering registration - GOV.UK

The Financial Intelligence Agency can impose civil monetary penalties for suspicious transaction report failures, but the maximum penalty amount is set at the discretion of the court if prosecuted criminally. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

The Director of Public Prosecutions (DPP) is responsible for criminal prosecutions of AML breaches, and the Supreme Court of Bermuda handles criminal matters for money laundering and terrorist financing offences. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

The BMA may conduct on-site and off-site examinations of digital asset businesses, and where deficiencies are identified, the BMA can issue formal directions to remediate within a specified timeframe. Link to loc.gov

In enforcement matters relating to digital asset businesses, the BMA has issued private warnings to licensees for minor compliance deficiencies, but to date, public enforcement cases involving digital asset firms remain limited. Anti-money laundering registration - GOV.UK

Under the Companies Act 1981, the Registrar of Companies may strike off or wind up a company that has ceased to comply with its legal obligations, which can serve as a supplementary enforcement tool in the digital asset space. Anti-money laundering registration - GOV.UK

The BMA possesses powers to investigate unlicensed digital asset businesses operating in Bermuda and can issue orders requiring cessation of business, with any contravention constituting an offence punishable by imprisonment and fine. Federal Register of Legislation Home Page

No tax guidance has been issued for virtual assets specifically, but under Bermuda's tax framework, there is no corporate income tax, no capital gains tax, no withholding tax, and no value-added tax (VAT) imposed on businesses or individuals. Trademark search

Bermuda operates a payroll tax system under the Payroll Tax Act 1995, which taxes employers based on the payroll of their employees, and this applies to digital asset businesses employing staff in Bermuda. Online Detainee Locator System

A digital asset business licensed in Bermuda may qualify for an exemption from certain taxes under the Tax Assurance Certificate regime, which provides assurance against the introduction of future taxes on profits or capital. Farmer Registry

Bermuda does not impose a goods and services tax or VAT on transactions, which means that digital asset trading and exchange services offered in Bermuda are not subject to indirect taxation. Anti-money laundering registration - GOV.UK

Corporate income tax is not levied on companies resident in Bermuda, so gains realized from the trading of digital assets by a Bermuda company are not subject to corporate taxation at the domestic level. Federal Register of Legislation Home Page

Bermuda has committed to the OECD's Base Erosion and Profit Shifting (BEPS) framework and the Global Minimum Tax (Pillar Two) for multinational enterprise groups with annual revenue above EUR 750 million, which may have future implications for digital asset groups. dlrms.land.gov.bd

The government of Bermuda completed a public consultation on a proposed corporate income tax regime, and as of the latest updates, the Bermuda Corporate Income Tax Act was enacted on December 3, 2024, but no guidance has been issued regarding virtual asset treatment. Press Information Bureau

No specific Bermuda tax guidance addresses whether staking, mining, or airdrop activities create taxable events for digital asset holders. Link to loc.gov

Although Bermuda has a comprehensive digital asset licensing framework, supervisory capacity and specialization within the BMA may be limited, as the authority has a relatively small team overseeing a broad range of financial services sectors. Anti-money laundering registration - GOV.UK

The FATF has identified gaps in Bermuda's beneficial ownership information access in past mutual evaluation assessments, which is a critical concern given the emphasis on transparency in the digital asset sector. Federal Register of Legislation Home Page

The traditional financial services infrastructure in Bermuda is limited, which creates practical challenges for digital asset businesses seeking banking partners for their operations. Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

The regulatory framework governing stablecoins and tokens that may qualify as securities or financial assets falls under the overlapping purview of the Securities Act 2006 and the Digital Asset Business Act 2018, creating interpretive ambiguity that has not been fully resolved. Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

Cross-border enforcement is a significant risk for Bermuda's digital asset businesses, since the insolvency regime does not have special provisions for the recovery or distribution of digital assets in a liquidation scenario. Link to loc.gov

The DABA itself has not been updated since its initial enactment, and it may not fully address evolving technologies such as decentralized finance (DeFi) platforms, non-fungible tokens (NFTs), and peer-to-peer protocols. Anti-money laundering registration - GOV.UK

Professional service providers with deep expertise in both digital assets and Bermuda law are scarce, and the practical reality is that applicants will likely need to engage international firms for complex regulatory matters. dlrms.land.gov.bd

The BMA's application timelines can be significantly longer than published expectations, with some applicants reporting multi-month waiting periods for approval following the submission of complete application packages. Press Information Bureau

The enforcement track record for digital asset businesses is short, and the absence of a publicly reported enforcement case history creates uncertainty as to the actual intensity of BMA supervision and vigilance. Trademark search

Digital asset custodians and exchanges face concentrated operational risk due to limited sub-custodial arrangements available in Bermuda for digital assets, and many businesses rely on third-party hosting outside the jurisdiction. Online Detainee Locator System

The lack of a statutory trust or legal framework recognizing the enforceability of smart contracts creates legal uncertainty for DeFi and tokenization businesses settling transactions on-chain. Farmer Registry

Hanford Site Near-Facility Environmental Monitoring Data Report for Calendar Year 1998

Life-Cycle Cost and Risk Analysis of Alternative Configurations for Shipping Low-Level Radioactive Waste to the Nevada Test Site

Anti-money laundering registration - GOV.UK

Federal Register of Legislation Home Page

Unlicensed digital asset business: Fine up to US$250,000 and/or 5 years imprisonment.

Unauthorized digital asset issuance: Fine up to US$100,000, 5 years imprisonment, or both.

Non-compliance with BMA directions: Fine up to US$2 million.

AML/ATF violations (e.g., POCA Regulations): Up to 2 years imprisonment and/or US$750,000 fine; BMA civil penalty up to US$10 million per failure.

Bittrex Global Limited (in liquidation) is a Bermuda entity currently subject to Bermuda Court of Appeal proceedings regarding customer crypto assets.

Violation: Non-compliance with DABA requirements and Bermuda Monetary Authority Digital Asset Custody Code of Practice (2019), including segregation of digital assets in the "Andromeda Omnibus Wallet"; also AML/ATF and KYC issues.

Bermuda courts are actively adjudicating liquidation sanctions, with the BMA having opposed a sanction application in recent proceedings, but there is no confirmation that a final penalty has been imposed or withheld due to specific ongoing court proceedings as of July 2025.

The BMA’s investigation of Custodian Life was appointed in August 2023 under DABA section 61, and the Supreme Court of Bermuda granted the BMA’s petition to wind up Custodian Life in October 2023; however, by February 2025, new mandatory custody segregation rules and consultations on DABA amendments have superseded the initial investigation stage.

The Bermuda Monetary Authority petitioned the Supreme Court of Bermuda to wind up Custodian Life, and the court granted the winding-up order with joint provisional liquidators appointed, not Teneo FA, and liquidation proceedings are ongoing.