ALC Information Bulletin - DAB Application Process

Summary

This BMA information bulletin explains how the Assessment and Licensing Committee (ALC) processes applications for licensing under the Digital Asset Business Act 2018. It sets out the ALC's composition and meeting schedule and details the documentation an applicant must submit for a general digital asset business licence, with extra requirements for Class M (sandbox) applications.

• Submission process: Applications must be emailed to innovate@bma.bm with a hard copy sent to the Fintech Department, and all documents must be in English.
• Timing: Applications received by 5:00 p.m. on a given Thursday are considered by the ALC four weeks later on a Thursday, with a response the following day (Friday); late applications may be pushed to the next cycle.
• Core application documents: A cover letter mapping the application to minimum licensing criteria, incorporation documents, a detailed business plan covering ownership, management, business strategy, customer protection, segregation of customer assets, insurance, financial projections, staffing, and outsourcing arrangements.
• AML/ATF and governance: Copy of AML/ATF policies and procedures per Regulation 16 of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008, and a declaration of awareness of and commitment to the Code of Practice under the Digital Asset Business Act 2018.
• Ownership and fitness checks: Information on corporate and individual shareholders/ultimate beneficial owners, including audited financial statements, personal declaration forms, bank references and net worth statements.
• Cybersecurity and monitoring: A proposed cybersecurity programme covering hot/cold key storage, plus arrangements giving the Authority real-time read-only access to transaction records and wallet addresses.
• Acceptance and personnel: Unconditional acceptance letters from the applicant's approved auditor and senior representative, the senior representative's CV, and the head office address.
• Foreign continuations: Applicants continuing an overseas operation into Bermuda must also provide a Certificate of Good Standing, foreign regulator contact details, and recent financial statements evidencing compliance with home jurisdiction capital, solvency and liquidity requirements.
• Class M (sandbox) applicants: Must additionally address exit roadmaps, prior sandbox participation, product differentiation, proof-of-concept testing plans, monitoring for breaches of class M conditions, and a wind-down contingency plan.

The Authority notes that missing documentation must be explained in writing, and incomplete applications may be deferred or deemed insufficient for ALC review.

Key obligations

• Submit digital asset business applications to innovate@bma.bm and provide a hard copy to the Fintech Department, with all documents in English
• Submit applications by 5:00 p.m. on the relevant Thursday to be considered by the ALC four weeks later
• Include a cover letter demonstrating how minimum licensing criteria under the Schedule to the Digital Asset Business Act 2018 are met, with written explanation for any omitted documentation
• Provide a comprehensive business plan covering ownership, management, business strategy, customer asset protection/segregation, insurance, financial projections, staffing, outsourcing and smart contract audits where applicable
• Provide AML/ATF policies and procedures as required under Regulation 16 of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008
• Provide shareholder/ultimate beneficial owner information including financial statements, personal declaration forms, bank references and net worth statements
• Submit a cybersecurity programme covering hot and cold private key storage
• Provide the Authority with real-time read-only access to digital asset transaction records and wallet addresses
• Obtain and submit unconditional acceptance letters from the applicant's approved auditor and senior representative
• Provide a declaration of awareness of and commitment to abide by the Code of Practice under the Digital Asset Business Act 2018
• Foreign entities continuing into Bermuda must provide a Certificate of Good Standing, foreign regulator contact information, and financial statements evidencing compliance with home jurisdiction requirements
• Class M applicants must provide additional business plan elements, sandbox history, product/testing details, monitoring plans and contingency/wind-down plans

Applies to

Digital Asset Business licence applicants, Class M (sandbox) applicants, overseas entities continuing operations into Bermuda as digital asset businesses

Deadlines

• 5:00 p.m. on the relevant Thursday: Deadline for applications to be received in order to be considered by the ALC four weeks later, with a response the following Friday; late applications may be deferred to a later week