Virtual Currency Business Act 2018 - Statement of Principles (April 2018)

Summary

This is the Bermuda Monetary Authority's Statement of Principles issued under section 5 of the Virtual Currency Business Act 2018. It explains how the Authority interprets the Schedule 1 minimum licensing criteria and the grounds for revocation, and how it exercises its powers to grant, restrict or revoke licences and to obtain information from virtual currency business service providers (VCBs). It is intended to be read alongside related Guidance Notes and the Authority's Statement of Principles on the Use of Enforcement Powers (SPUEP), which prevails over this document in case of conflict on enforcement matters.

• Fit and proper persons: Controllers and officers of a VCB must be fit and proper, assessed on competence, soundness of judgment, diligence and probity, including criminal record, past regulatory censure and business conduct history.
• Prudent conduct of business: VCBs must conduct business prudently, with effective board and senior management control, adequate accounting and record keeping systems, and policies to prevent money laundering, terrorist financing and to comply with international sanctions.
• Integrity, skill and corporate governance: The Authority interprets criteria requiring integrity and skill in the conduct of business and sound corporate governance arrangements, including board composition and oversight.
• Consolidated supervision: Where relevant, the Authority considers whether a VCB and its group can be supervised on a consolidated basis.
• Licence granting considerations: Section IV sets out factors the Authority weighs when deciding whether to grant a licence.
• Information and reporting powers: Sections 58, 59 and 60 of the Act give the Authority power to require information, reports (including auditor reports), documents, and to enter business premises of VCBs and related persons.

The Principles also describe the Authority's ongoing supervisory approach, including off-site analysis, prudential discussions with senior management, and routine on-site compliance reviews, and note the statutory requirement for VCBs to submit an officer-signed certificate of compliance with the minimum licensing criteria under section 66 of the Act.

Key obligations

• VCBs must alert the Authority forthwith upon becoming aware of breaches or potential breaches of the minimum licensing criteria.
• VCBs must alert the Authority to any proposed material change in their business.
• VCBs must notify the Authority immediately if they become aware of material concerns regarding the suitability of a shareholder controller.
• VCBs must submit information about their business at intervals determined by the Authority in accordance with the Act and related regulations, rules, guidance notes or codes.
• VCBs must have policies and procedures enabling compliance with international sanctions in force in Bermuda.
• VCBs must submit a certificate of compliance, signed by an officer, certifying compliance with the minimum criteria as required under section 66 of the Act.
• VCBs must produce documents or information when required by written notice under sections 58 and 59 of the Act, and permit entry to business premises under section 60 where notice has been served.

Applies to

virtual currency business service providers (VCBs), controllers and officers of VCBs, shareholder controllers of VCBs

Related documents

• This document is made under Virtual Currency Business Act 2018