Guidance Note - Digital Asset Business - Guidance for prospective applicants for licensing (September 2025)

Summary

This is a Bermuda Monetary Authority guidance note explaining what it expects to see in applications for a Digital Asset Business (DAB) licence under the Digital Asset Business Act, 2018. It is non-binding guidance rather than law, intended to help prospective applicants (Class T, M or F licences) prepare complete, proportionate applications covering legal structure, governance, risk management, AML/ATF, cyber risk and business-model-specific considerations.

• Architecture and operations: Applicants should submit detailed ownership charts, affiliate/group structure information, legal vehicle design (including bankruptcy-remote structures such as SAC/ISAC/trusts), draft legal documentation, and process flow diagrams for client asset handling.
• Business plan detail: Full descriptions of regulated and unregulated business lines, projected customer numbers, transaction volumes, balance sheet exposure, revenue streams, and a phased product/business-line rollout roadmap with launch timelines.
• Governance and three lines of defence: Documentation of corporate governance, compliance function, operational/credit/liquidity/market risk management, AML/ATF programme, conduct and client disclosure practices, cyber risk controls, and internal audit arrangements, scaled to the licence class and business complexity.
• Business-model-specific guidance: Separate expectations for spot trading platforms, derivatives/margin trading, stablecoin and token issuers, custodians, lending and borrowing, and staking businesses.
• Proportionality and comparison table: An appendix comparison table sets out escalating documentation and control expectations (basic, advanced, comprehensive) across governance, risk, insurance, head office, wind-down planning and financial projections depending on licence tier.
• Material changes: Any new products, services or business lines introduced after licensure, or changes not covered by the initial licence, require a material change notification under section 22 of the Act unless a waiver under section 8 is obtained.

The note also flags that waivers or modifications under section 8 of the Act (e.g. exemption from material change notification, or additional outsourcing) require detailed supporting policies demonstrating adequate selection criteria, due diligence and ongoing monitoring.

Key obligations

• Applicants must submit a comprehensive ownership chart identifying all direct and indirect shareholders and beneficial owners, with 'shareholder controllers' completing Personal and Institutional Questionnaires.
• Applicants using bankruptcy remote structures (SAC, ISAC, trust) must provide full draft legal documentation, a rationale for the structure, and legal opinions on its effectiveness.
• Applicants must submit process flow diagrams showing client asset handling, on-chain/off-chain distinctions, and compliance checkpoints for each business line.
• Applicants must provide financial projections covering all business lines (regulated and unregulated), broken down by quarter for the first 12 months and over a three-year horizon.
• Applicants must submit a product and business line rollout roadmap distinguishing offerings available at licensure from future planned offerings.
• Any introduction of new products, services or business lines after licensure requires a material change notification under section 22 of the Act unless a waiver is obtained under section 8.
• Applicants seeking waivers under section 8 (e.g. from material change notification or for outsourcing changes) must submit supporting policies detailing selection criteria, due diligence and ongoing monitoring.
• All non-English documentation submitted must be accompanied by certified translations.
• Applicants must document accounting and reconciliation processes to safeguard against client asset misallocation, particularly for bankruptcy remote structures.

Applies to

Digital Asset Business licence applicants, Class T licensees, Class M licensees, Class F licensees, spot trading platforms, derivatives/margin trading businesses, stablecoin and token issuers, custodians, lending and borrowing platforms, staking service providers