Bermuda House of Assembly passes ICO Act
The Companies and Limited Liability Company (Initial Coin Offering) Amendment Act 2018 (ICO Act) has been passed by the Bermuda House of Assembly.
Once the ICO Act receives the approval of the Senate and Royal Assent, it will become operative by notice of the Minister of Finance (Minister), which is expected to occur during May 2018.
Legal firm Appleby said that the ICO Act will regulate all aspects of offering digital assets to the public as a means for a Bermuda company to raise capital. A digital asset covers all forms of cryptocurrencies, digital coins and tokens issued in connection with initial coin offerings (ICOs).
The Act makes the latest move on the part of the Government of Bermuda to expand the range of businesses that operate on the Island, as well as to encourage more technology-related companies to open on Bermuda. ICOs can be used to raise funds for re/insurers but in many places are not regulated.
The Act affects those who are interested in creating, promoting, investing in and using ICOs and digital assets as well as companies who are seeking to raise capital through initial coin offerings.
Appleby points out that the ICO Act does not seek to regulate persons or companies who are concerned solely with private sales or whose ordinary business involves the acquisition, disposal or holding of digital assets.
Only companies registered under the Companies Act 1981 (as amended) and Limited Liability Company Act 2016 (as amended) who have the consent of the Minister are permitted to issue ICOs in or from within Bermuda.
Under the ICO Act, ICOs will be treated as a restricted business activity requiring prior consent from the Minister. To assist with the vetting of applications, a FinTech Advisory Committee will be formed to assist in the review of each application and make recommendations to the Minister.
