‘Landmark’ initial coin offering bill tabled

  • Wayne Caines, the Minister of National Security, addresses a panel on Bermuda's emerging fintech industry (Photograph supplied)

Rules to regulate a boom market in cryptocurrencies were tabled yesterday in the House of Assembly.

Wayne Caines, Minister of National Security, said the new rules would make Bermuda one of the first countries in the world to regulate initial coin offerings.

The Companies and Limited Liability Company (Initial Coin Offering) Act, which will be debated at a later sitting of the House, was designed to make ICOs a restricted business activity requiring consent from the Minister of Finance.

Mr Caines said: “It is generally accepted that ICOs are, in most cases, a method of crowdfunding projects or services.

“However, ICOs may also be used to convey some interest in or right to access or use a physical asset.

“Embracing this new world with responsible regulation could lead to the attraction of new companies and capital investment to Bermuda, additional government revenues, new career, employment and training opportunities for Bermudians and the laying of a foundation for a prosperous future for our next generation of Bermudians.”

The minister said the move meant Bermuda was “enhancing our global reputation and introducing viable ways to strengthen and diversify our economy”.

The tabling of the legislation followed a presentation on Thursday by Mr Caines and members of the blockchain task force to more than 150 businesspeople.

Mr Caines said interest in virtual currencies was “significant”.

He added: “We are proving that we can be a leader in this space, and I wish to thank the members of blockchain task force which included a business development working group and a legal and regulatory working group for working with the Government to bring forth this ground-breaking legislation.”

An application for consent would be required to include specific details about the company conducting the ICO and the digital asset offered for sale under the Act.

Applicants would also have to detail the development of any product or service related to the ICO, the target amount to be raised and the technology to be used to confirm and store purchaser identity information.

Sean Moran, head of business development for the Bermuda Business Development Agency, said that the same qualities that made the island a respected jurisdiction in international business were “now being extended to technologists and innovators”.

He said: “This promises to be an exciting evolution for Bermuda, and we’re pleased it’s being carried forward with careful legislation, contemporary regulatory oversight, and most of all, the type of collaboration our market is renowned for.

“Our message is that Bermuda is a sensible platform from which these emerging technology companies can do their global business.”

The legislation was one of three Bills tabled in a 15-minute sitting of the House.