Bermuda has quickly emerged as a leading jurisdiction for digital asset businesses and cryptocurrency exchanges, thanks to its comprehensive regulatory framework, stable political and economic environment, skilled workforce, favorable tax regime, and a supportive government. The Bermuda Monetary Authority (BMA) is the primary regulator of digital asset businesses in the country, fostering an environment that promotes innovation while also protecting investors and consumers.
As of March 2023, Bermuda is home to 23 licensed digital asset businesses, offering services such as digital asset trading, custody, issuance, and advisory services. These businesses are predominantly located in Hamilton, the capital of Bermuda. Notable digital asset businesses licensed in Bermuda include Coinbase, Coinfloor, EQONEX, Genesis Global Trading, iFinex (Bitfinex), LedgerPrime, Omniex, Paxos, SFOX, and Tether.
To set up a digital asset business or crypto exchange in Bermuda, several requirements must be met. Businesses need to present a sound business plan, have adequate risk management procedures in place, provide clear and accurate information to customers, and maintain adequate records. The BMA actively promotes Bermuda as a jurisdiction for digital asset businesses, and it has initiatives such as a regulatory sandbox, a mentorship program, and a training program for digital asset professionals.
Capital requirements and filing fees for setting up a digital asset business in Bermuda vary depending on the type of license sought. For the Test license, the minimum capital requirement is $50,000 and the filing fee is $500. For the Modified license, the capital requirement is $100,000 and the filing fee is $1,000. Lastly, for the Full license, the minimum capital requirement is $250,000.
The filing fees for a digital asset business license in Bermuda also vary depending on the type of license. For the Test license, the filing fee is $1,000. For the Modified license, the filing fee is:
The estimated client receipts are the gross revenue earned in the year preceding the year of assessment arising from digital asset business services provided or product sales to clients by a licensed undertaking.
For example, if you are applying for a Full (F) License and your estimated client receipts are $1 million, the filing fee would be $200,000.
In conclusion, Bermuda has established itself as a viable location for setting up a digital asset business or cryptocurrency exchange. Its forward-thinking regulations, skilled workforce, and supportive government initiatives make it an attractive destination for businesses in the crypto space. However, prospective businesses must prepare to meet stringent regulatory requirements and significant capital and filing fees, particularly for a Full license.
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