Crypto Custody Rules Published By Bermuda Monetary Authority

News, Regulation | January 2, 2019 By:

The Bermuda Monetary Authority (BMA), the country’s financial services regulator, has released a draft regulation for cryptocurrency custodial services.

Released last month, the draft law, titled Code of Practice for Digital Asset Custody, aims to ensure a high level of care when safeguarding client’s assets. The code covers both technology and business controls in specific areas like hot and cold storage, key generation, transaction handling, incident reporting and more.

“The Digital Asset Business Act 2018 (the Act) makes provision for Digital Asset Business licences and gives power to the authority to issue Codes of Practice to ensure the business is conducted in a prudent manner,” the BMA said. “The code published today seeks to protect the public and to clarify the authority’s expectations in terms of the custody of digital assets.”

Moad Fahmi, senior adviser at the BMA, said that they view custody as an important part of a healthy digital asset ecosystem – “one that will encourage quality players to contribute positively to our financial system.”

“We remind stakeholders that the framework was built with the aim of making sure that the core objectives of financial regulation are respected, that is: protecting consumers, ensuring stability of our institutions and maintaining integrity and confidence in financial markets – with a focus on maintaining the highest standards of AML/ATF,” Fahmi said.

Craig Swan, managing director in charge of supervision at the BMA, said that the code is aligned with the BMA’s 2018 Business Plan objectives of being proactive, comprehensive and forward-looking.

“This technical publication highlights the quality of the work done by our team at the BMA to build on our cybersecurity acumen as we move to become regulatory leaders in digital assets,” Swan said.