Bermuda Compliance Report

Generated 2026-10-23

Comprehensive Framework

Regulatory Overview

Regulatory Status: Dedicated crypto/VA legislation, licensing regime, active enforcement
Key Regulator(s): Financial Intelligence Agency
Primary Legislation: s own business/project falls under the Digital Asset Issuance Act (DAIA), separate from DABA, Digital Asset Business Act 2018 (DABA): Core licensing framework., Investment Funds Act 2006: For tokenised funds involving stablecoins, Digital Asset Issuance Act (DAIA, 2020): Regulates public offerings of new digit, Digital Asset Business Act (DABA) 2018: Establishes the core framework for regul, ICO Act, Bermuda permits crypto trading and exchanges under regulation, recognizing them
Travel Rule: Adopted — Threshold: Implemented
Tax Reporting: Capital Gains Tax: None levied on digital assets.. Income Tax on Crypto: No income tax on digital assets or related transactions; the 2025 corporate regime overrides prior tax undertakings but targets only large multinationals.. VAT/GST: No VAT or GST applies to cryptocurrencies.. Foreign Currency Purchase Tax: A 1% tax applies to purchases of foreign currency from Bermuda-based banks by residents, but this does not cover crypto purchases, which occur via exchanges.. Digital Asset Business Act (DAB Act, 2018): Requires licensing from the Bermuda Monetary Authority (BMA) for activities like issuing/selling digital assets, operating exchanges, custodial wallets, or payment services using digital assets. Licensed entities must segregate client assets, maintain bonds/insurance, and comply with cybersecurity/prudential rules.

Key Facts

aml 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 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
banking The regulatory landscape for cryptocurrencies and digital assets in Bermuda is evolving, with a focus on maintaining financial stability while embracing innovative technologies. As of October 2023, the Bermuda Monetary Authority (BMA) has not yet issued specific guidelines exclusively for cryptocurrencies; however, existing banking regulations may apply to digital asset services. HSBC Bermuda - Credit Cards, Accounts, Mortgages, Loans Bermuda's banking sector is overseen by the Bermuda Monetary Authority (BMA), which sets regulations to ensure the integrity and stability of the financial system. The BMA’s oversight includes monitoring emerging technologies such as digital assets, though detailed guidance remains pending. Bermuda - Economy and Banking Sector To operate in Bermuda's financial sector, entities must obtain a license from the BMA. Cryptocurrency exchanges and wallet providers would likely fall under existing banking licenses. As of October 2023, the BMA has not issued specific guidance on licensing cryptocurrency-related services; however, applicants are expected to meet general banking license criteria, including thorough due diligence on capital adequacy and risk management practices. Bermuda Monetary Authority 2026 Business Plan: Overview... Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations are critical components of Bermuda's banking framework, applicable to digital asset service providers. The BMA requires robust AML/KYC procedures to prevent illicit activities such as money laundering and terrorist financing. Bermuda: Assessment of the Supervision and Regulation of the... Service providers must implement systems that comply with international standards, including the Financial Action Task Force (FATF) recommendations, as highlighted in a recent BMA advisory dated September 2023. BANKING & FINANCE The BMA has the authority to impose penalties, including fines and license revocation, for non-compliance with regulatory requirements. This enforcement capability was reaffirmed in a September 2023 BMA notice regarding compliance with AML/KYC standards. Expat Focus - Bermuda Banking The BMA’s website provides direct access to their enforcement policies: BMA Enforcement Policies. Cryptocurrency transactions in Bermuda are subject to income tax on gains realized from such transactions. As of October 2023, the applicable rate aligns with general capital gains taxation under the Income Tax Ordinance.
custody Bermuda has established a comprehensive regulatory framework for cryptocurrency and digital asset custody, positioning itself as a leading jurisdiction for institutional crypto services. The Bermuda Monetary Authority (BMA) oversees the licensing and regulation of digital asset custodial services under the Insurance Act 1978 and recent amendments specific to crypto custody. Institutions seeking to provide digital asset custody in Bermuda must obtain a Crypto Wallet Custody License from the BMA. The application process involves demonstrating robust security measures, compliance with AML/KYC standards, and financial stability. Licensed custodians must implement stringent AML/KYC procedures, including customer due diligence, ongoing monitoring, and reporting of suspicious transactions to the BMA. The BMA has the authority to impose fines, suspend licenses, or take other enforcement actions against custodial services that fail to comply with regulatory requirements. Digital assets held in custody by licensed Bermudian entities are generally tax-exempt under the Bermuda Insurance Act, provided they are used for legitimate financial services and comply with reporting obligations. Regulatory Uncertainty: Ongoing global shifts in crypto regulation may affect Bermuda's jurisdictional stability. Operational Risk: Ensuring the highest security standards and resilience against cyber threats remains a critical challenge for custodial services.
enforcement Regulator: Bermuda Monetary Authority (BMA). Entity targeted: Bittrex Global (Bermuda) Ltd (Class F Full DABA licensee, ceased operations in 2024). Violation type: Non-compliance with DABA requirements, including segregation of digital assets in the "Andromeda Omnibus Wallet," Digital Asset Custody Code of Practice (2019), AML/ATF, KYC, and UN Sanctions protocols (identified via 2022 onsite inspections). Penalty amount: Not specified in sources. Date: BMA concerns raised in 2022 inspections; investigation appointed August 2023 under DABA section 61; Supreme Court ruling May 2025 (Lai and others v BMA); sanction application July 2025. Outcome: BMA appointed Teneo FA for investigation; company in liquidation with joint liquidators seeking court sanction for interim distribution to former customers (July 2025 ruling approved steps); UBOs/directors' legal challenge rejected by Supreme Court in May 2025. Fines up to US$250,000 and/or 5 years imprisonment for unlicensed digital asset business. Fines up to US$10,000,000 for DABA breaches or non-compliance with BMA directions. License revocation, public censure, prohibition orders, or court injunctions. Unlicensed digital asset business: Fine up to US$250,000 and/or 5 years imprisonment.
general The exact effective date of Bermuda's Travel Rule implementation Specific threshold amounts for transaction reporting A detailed list of which VASPs are covered
licensing Items used as a medium of exchange, unit of account, or store of value (not legal tender). Representations of assets like debt or equity in the promoter. Representations of other assets or associated rights. Access to applications, services, or products via distributed ledger technology (excluding certain affinity/rewards programs). If issuing securities via digital assets, prior BMA approval is required, plus additional policies compliant with BMA securities issuance rules. Pure digital asset issuance to fund the issuer's own business/project falls under the Digital Asset Issuance Act (DAIA), separate from DABA's business licensing. ICOs are restricted activities needing BMA approval; no physical presence required, but economic substance rules apply. Exemptions are limited (e.g., non-exchangeable rewards); most token issuance to third parties requires licensing.
sanctions Crypto VASP Compliance: Virtual Asset Service Providers (VASPs) in Bermuda must obtain a license from the Bermuda Monetary Authority (BMA). The licensing process involves comprehensive risk assessments, including sanctions screening and AML/KYC protocols tailored to digital asset transactions. Licensed VASPs are permitted to operate within Bermuda's regulated framework. Bermuda AML & KYC Rules for Crypto VASPs | Cryptoverse Lawyers Sanctions Screening: Entities in the cryptocurrency sector are required to implement robust sanctions screening mechanisms to detect and prevent transactions involving sanctioned parties. The Mutual Evaluation Report of Bermuda highlights the necessity for real-time screening tools integrated into transaction processing systems. Mutual Evaluation Report of Bermuda Regulatory Oversight: The BMA actively enforces compliance with sanctions and AML/KYC regulations through audits, inspections, and the imposition of penalties for non-compliance. Recent enforcement actions have targeted cryptocurrency exchanges that failed to maintain adequate sanctions screening protocols. Securing Regulatory Compliance - Money Laundering - Bermuda Tax Implications for Crypto Transactions: Gains from digital asset exchanges are subject to capital gains tax in Bermuda at a rate of 10%. Entities must ensure compliance with reporting requirements outlined by the BMA, which includes filing Form VAS-1 annually and providing detailed transaction disclosures within 30 days of each exchange. Bermuda: Securing Regulatory Compliance | Appleby Recognition by FATF: Bermuda is a recognized jurisdiction by the Financial Action Task Force (FATF), having successfully completed its mutual evaluation in 2020. This status reflects Bermuda's commitment to implementing global standards for combating money laundering and terrorist financing, including those applicable to digital assets. Mutual Evaluation Report of Bermuda Financial Backing for Licensing: The BMA mandates a capital requirement of BM$500,000 (approximately EUR 460,000 / USD 530,000) for entities seeking to operate as licensed VASPs in Bermuda. This ensures financial stability and operational capacity to meet regulatory obligations. Bermuda AML & KYC Rules for Crypto VASPs | Cryptoverse Lawyers Emerging Risks: Despite robust regulatory measures, Bermuda faces challenges in keeping pace with the rapidly evolving cryptocurrency landscape. Notable gaps include the need for enhanced international cooperation on sanctions enforcement and the development of standardized KYC processes for decentralized finance (DeFi) platforms. Bermuda - Global Sanctions Guide UK-Bermuda Joint Statement on Sanctions - GOV.UK
sandbox Bermuda has established a regulatory sandbox specifically for insurtech projects, positioning itself as an early adopter in the fintech sector. Bermuda sandbox first for insurtech project - The Royal Gazette The sandbox framework aims to facilitate innovation while ensuring compliance with regulatory standards, providing a controlled environment for testing new financial technologies. PowerPoint Presentation Cyber-risk modellers are setting up within the Bermuda sandbox, highlighting its relevance for advanced risk assessment tools in the insurance sector. Cyber-risk modeller sets up Bermuda sandbox - The Royal Gazette The Bermuda Monetary Authority (BMA) emphasizes innovation in insurance, supporting the growth of insurtech through streamlined regulatory processes. Innovation - BMA Bermuda’s regulatory sandbox is designed to accommodate a wide range of fintech innovations, including cryptocurrency and digital asset platforms, under a flexible yet robust oversight regime. The framework mandates that participants adhere to strict compliance protocols while benefiting from expedited regulatory review processes. Innovation: Bermuda’s InsurTech Revolution Entities seeking to operate within the cryptocurrency sandbox must apply for a specialized license through the BMA, demonstrating compliance with anti-money laundering (AML) and know your customer (KYC) standards. The licensing process includes thorough risk assessments and may require periodic reporting to ensure ongoing adherence to regulatory expectations. Crypto License in Bermuda - IncFine
securities The regulatory landscape for cryptocurrencies and digital assets in Bermuda is evolving, with a focus on maintaining the island's reputation as a stable financial center while adapting to new technologies. Bermuda operates under a robust regulatory framework overseen by the Monetary Authority of Bermuda (MAB), which ensures that financial institutions comply with stringent standards to protect investors and maintain market integrity. Entities engaging in cryptocurrency-related activities must obtain appropriate licenses from the MAB, demonstrating compliance with anti-money laundering (AML) and know your customer (KYC) regulations. Cryptocurrency exchanges in Bermuda are required to implement comprehensive AML/KYC protocols, including customer due diligence and ongoing monitoring, to prevent illicit financial activities. The MAB has the authority to impose penalties on non-compliant entities, including fines and revocation of licenses, reflecting a firm stance against regulatory breaches. Cryptocurrency transactions in Bermuda are subject to capital gains tax, with specific guidance provided by the Inland Revenue Department to ensure proper taxation of digital asset activities. Despite a strong regulatory foundation, gaps exist in the clear classification of certain digital assets as securities or commodities, posing potential risks for market participants and regulators alike. Country update Bermuda securities and banking
stablecoin Authority: Bermuda Monetary Authority (BMA) Primary Law: Digital Assets Business Act (DABA), Chapter 158 of the Revised Laws of Bermuda, 2018 International Standing: Bermuda is recognized by the Financial Action Task Force (FATF) as a jurisdiction with a comprehensive AML/CFT framework for digital assets. Entities seeking to issue, operate, or provide services related to stablecoins or other digital assets in Bermuda must obtain a license under the DABA. Providing custodial services for digital assets. Offering digital asset exchange services. Engaging in digital asset custodial or safekeeping services. The DABA does not specify monetary thresholds for capital reserves but mandates that stablecoin issuers maintain 1:1 reserves with outstanding stablecoins, comprising U.S. dollars and short-term Treasuries.
status The Bermuda Monetary Authority (BMA) is the primary regulator, responsible for licensing, supervision, enforcement, and approving activities like initial coin offerings (ICOs), which are classified as restricted business activities. Digital Asset Business Act (DABA) 2018: Establishes the core framework for regulating digital asset businesses, including definitions, licensing requirements, and ongoing obligations; supplemented by rules such as the Digital Asset Business (Cybersecurity) Rules 2018, Digital Asset Business (Client Disclosure) Rules 2018, and Digital Asset Business (Prudential Standards) (Annual Return) Rules 2018. Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (ICO Act): Specifically governs ICOs and digital business assets. Bermuda permits crypto trading and exchanges under regulation, recognizing them as digital asset businesses; it supports activities like stablecoin issuance (e.g., a planned Bermuda dollar-backed stablecoin) and has licensed nearly 50 digital asset companies, including exchanges and related services. Unauthorized digital asset issuance or business conduct is a criminal offense, punishable by fines up to US$100,000, up to five years imprisonment, or both. No ban exists; the framework integrates crypto with traditional finance, such as reinsurance-linked stablecoins, and has hosted events like the world's first fully licensed USDC airdrop. All digital asset businesses (incorporated in or outside Bermuda but operating in or from Bermuda) must obtain a Class M, F, or S license from the BMA, depending on the activity (e.g., exchanges, custody, trading). Examples include Jewel Bank (first with DABA and banking license) and firms like Onre under dual licenses.
tax Capital Gains Tax: None levied on digital assets. Income Tax on Crypto: No income tax on digital assets or related transactions; the 2025 corporate regime overrides prior tax undertakings but targets only large multinationals. VAT/GST: No VAT or GST applies to cryptocurrencies. Foreign Currency Purchase Tax: A 1% tax applies to purchases of foreign currency from Bermuda-based banks by residents, but this does not cover crypto purchases, which occur via exchanges. Digital Asset Business Act (DAB Act, 2018): Requires licensing from the Bermuda Monetary Authority (BMA) for activities like issuing/selling digital assets, operating exchanges, custodial wallets, or payment services using digital assets. Licensed entities must segregate client assets, maintain bonds/insurance, and comply with cybersecurity/prudential rules. Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (ICO Act): Mandates company registration with the Registrar of Companies for ICOs conducted in or from Bermuda.
travel rule Bermuda has a regulated digital asset sector where cryptocurrency businesses are legal and must be licensed by the Bermuda Monetary Authority (BMA). Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette The primary legal framework for AML/ATF compliance, including the travel rule, is Part Four of the Proceeds of Crime (AML and Anti-Terrorist Financing Supervision and Enforcement) Act 2008, as administered by the BMA. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette As of November 2025, the BMA has confirmed that stringent new travel-rule data requirements for digital asset transfers are now in force, with no exemption for transaction size. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette The BMA has held AML outreach webinars to communicate these obligations to the industry, and the changes apply to all payment service providers operating in Bermuda. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette Bermuda is positioning itself for a Caribbean FATF mutual evaluation, and the BMA frames these updates as part of maintaining the jurisdiction’s reputation as a reputable international financial centre. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette The Bermuda Monetary Authority (BMA) is the primary regulator for digital asset businesses and AML/ATF supervision in Bermuda. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette The BMA’s AML/ATF supervision is conducted by named senior analysts including Luis Goncalves (senior analyst, supervision AML/ATF) and Tyron Gounden (senior analyst AML/ATF supervision). Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette The principal law governing AML/ATF obligations is the Proceeds of Crime (AML and Anti-Terrorist Financing Supervision and Enforcement) Act 2008, specifically its Part Four, which is the Bermuda legislative embodiment of the travel rule. Sweeping ‘travel rule’ changes for digital assets - The Royal Gazette

Sources

This report is AI-generated from publicly available regulatory sources. Last updated: 2026-10-16. View full profile