Bermuda's Leniency Toward Cryptocurrencies May Soon Change With New Rules
Scroll DownDavid Burt, the Premier of Bermuda, argues that a situation similar to QuadrigaCX couldn’t have happened in Bermuda due to the country’s current legislation regarding cryptocurrencies. These statements were made during an interview on Fortune’s “Balancing the Ledger” program on March 25th. Burt issued his comments about the situation following the sudden death of QuadrigaCX’s founder, Gerald Cotten, in December. The exchange faced financial difficulties shortly after Cotten’s death because the organization was unable to access their cold wallets where most of their assets were kept. This was due in part to Cotten having the corresponding keys to the wallets. During the interview, Burt stated that the private keys wouldn’t have been lost if the exchange had been registered in Bermuda instead of Canada. Burt believes that if Quadriga had been licensed under the Bermuda Monetary Authority, there would’ve been rules regarding their master keys that would have prevented them from being held by only one individual. Burt also addressed the country’s Digital Asset Business Act of 2018, which regulates boundaries for cryptocurrency and blockchain-based businesses, and protects the rights of their potential and existing clientele. What this means regarding the master keys is that the company would need to take steps to ensure that they are never lost, and to have a recovery plan in place in case something were to happen. Bermuda has been known for years to be friendly towards cryptocurrency and blockchain. Last year, their government announced that they were going to amend the Banking Act to establish a new banking class that would render services to local blockchain and fintech organizations. This way, individual bank policies which don’t offer banking services for these new companies can’t be allowed to discourage delivery on their promise of economic success and growth for Bermudians. Bermuda also executed new initial coin offering regulations that require all Bermudian ICO issuers to include comprehensive information about anyone who’s involved with ICOs.
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