Digital Asset Business Act 2018

The Digital Asset Business Act 2018 (DABA) is a legislative framework for the operation of digital asset businesses and services in a regulatory environment.

Scope of DABA (excerpt)

Subject to section 4(5), in this Act, “digital asset business” means the business of providing any or all of the following digital asset business activities to the general public

  • issuing, selling or redeeming virtual coins, tokens or any other form of digital asset;
  • operating as a payment service provider business utilising digital assets which includes the provision of services for the transfer of funds;
  • operating as an electronic exchange;
  • providing custodial wallet services;
  • operating as a digital asset services vendor.

As per DABA, conducting a digital asset business in or from within Bermuda requires a license (unless exempt), of which there are currently two classes:

  • Class M: Restricted License for a defined time period. Innovative businesses involved in the testing of new products and services may use a regulatory sandbox.
  • Class F: Full License, not time restricted. 

Related publications to DABA include: Code of Practice; Statement of Principles; Cybersecurity Rules Application Process.

The following is the table of contents for DABA 2018.

  • PART I  PRELIMINARY
    • Citation
    • Interpretation
    • Meaning of "director", "controller", "senior executive" and "associate"
    • Carrying on digital asset business in Bermuda
    • Authority’s statement of principles and guidance provision
    • Codes of practice
    • Prudential and other returns
    • Authority may exempt or modify prudential standards or requirements or take necessary actions
    • Advisory Panel
  • PART 2 LICENSING
    • Restriction on carrying on digital asset business without a licence
    • Exemption order
    • Digital asset business licence
    • Grant and refusal of applications
    • Determination of class of licence
    • Display and registration of licence
    • Fees
    • Separate accounts
    • Custody and protection of client assets
    • Senior representative
    • Senior representative to report certain events
    • Head Office
    • Material change to business
    • Restriction of licence
    • Revocation of licence
    • Winding up on petition from the Authority
    • Notice of restriction or revocation of licence
    • Restriction in cases of urgency
    • Directions to protect interests of clients
    • Notification and confirmation of directions
    • Surrender of licence
  • PART 3 AUDITED ACCOUNTS
    • Duty to prepare annual audited financial statements and accounts
    • Appointment of auditors
    • Auditor to communicate certain matters to Authority
  • PART 4 OBJECTIONS TO SHAREHOLDER CONTROLLERS
    • Notification of new or increased control
    • Objection to new or increased control
    • Objection to existing controller
    • Contraventions by controller
    • Restriction on sale of shares
  • PART 5 DISCIPLINARY MEASURES
    • Power to impose civil penalties for breach of requirements
    • Civil penalties procedures
    • Public censure
    • Public censure procedure
    • Prohibition orders
    • Prohibition orders: procedures
    • Applications relating to prohibition orders: procedures
    • Determination of applications for variation, etc.
    • Injunctions
  • PART 6 RIGHTS OF APPEAL
    • Rights of appeal
    • Constitution of tribunals
    • Determination of appeals
    • Costs, procedure and evidence
    • Further appeals on a point of law
  • PART 7 NOTICES AND INFORMATION
    • Warning notices
    • Decision notices
    • Notices of discontinuance
    • Publication
    • Notification of change of controller or officer
    • Power to obtain information and reports
    • General power to require production of documents
    • Right of entry to obtain information and documents
  • PART 8 INVESTIGATIONS
    • Investigations on behalf of the Authority
    • Investigations of suspected contraventions
    • Power to require production of documents during investigation
    • Powers of entry
    • Obstruction of investigations
  • PART 9 CERTIFICATE OF COMPLIANCE
    • Certificates of compliance
  • PART 10 RESTRICTION ON DISCLOSURE OF INFORMATION
    • Restricted information
    • Disclosure for facilitating the discharge of functions of the Authority
    • Disclosure for facilitating the discharge of functions by other authorities
    • Information supplied to the Authority by relevant overseas authority
  • PART 11 MISCELLANEOUS AND SUPPLEMENTAL
    • Access to and maintenance of client transaction records
    • False documents or information
    • Offences
    • Prohibition on use of words "digital asset business"
    • Notices
    • Service of notice on Authority
    • Civil debt and civil penalties
    • Regulations
    • Transitional
    • Consequential amendments
    • Commencement
  • SCHEDULE 1
    • Minimum Criteria for Licensing
  • SCHEDULE 2
    • Consequential Amendments

Document Details

Document Type: 
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Authoring Country: 
Originating Country or Trade Block: 
Issue Status: 
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Year of Document: 
2018
Date of Document: 
Monday, September 10, 2018
Document Authors: 
Bermuda Monetary Authority and Bermuda Government

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