Virtual Currency (Client Disclosure) Rules 2018

Summary

These Rules, made by the Bermuda Monetary Authority under the Virtual Currency Business Act 2018, set out mandatory client disclosure requirements for licensed virtual currency undertakings. They specify what must be disclosed to clients before an initial transaction, at the time of entering into a service agreement, and at the conclusion of each transaction.

• Pre-transaction disclosure: Before entering into an initial transaction, a licensed undertaking must disclose all material risks associated with its products, services and activities, plus any other disclosure the Authority deems necessary for client protection, provided separately from other information and in a form the client can record.
• Alternate disclosures: A licensed undertaking may apply to the Authority for permission to provide alternate disclosures; the Authority may weigh client protection and the nature, scale and complexity of the undertaking's business in deciding.
• Agreement-stage disclosures: At the time of entering an agreement, undertakings must disclose (where applicable) the class of licence held, fee schedules and payment methods, insurance coverage, irrevocability of transfers, liability and recovery for unauthorised or mistaken transfers, contact-update procedures, ability to stop pre-authorised transfers, receipt processes, and a requirement to give at least 30 days prior notice of material changes to terms and conditions.
• Post-transaction confirmation: At the conclusion of each transaction, undertakings must provide written confirmation including their name and contact details, complaint and inquiry contact information, transaction details (type, value, date, precise time, amount), and any fees charged including currency conversion fees.

The Rules apply to every licensed undertaking conducting virtual currency business under the Virtual Currency Business Act 2018 and are aimed at ensuring clients receive clear, standalone, and timely information about risks, fees, liabilities and account terms.

Key obligations

• Licensed undertakings must disclose all material risks and any Authority-required disclosures to a client before entering into an initial transaction, provided separately from other information and in a recordable format
• Licensed undertakings may apply to the Authority for approval to provide alternate disclosures to clients
• At the time of entering into a client agreement, licensed undertakings must disclose licence class, fee schedules and calculation methods, insurance coverage, transfer irrevocability terms, liability and recovery procedures for unauthorized transfers, contact-update procedures, stop-payment procedures, and receipt processes
• Licensed undertakings must give clients at least thirty days prior notice of any material change to the terms and conditions of services, including account policy amendments
• At the conclusion of each transaction, licensed undertakings must provide written confirmation containing their contact details, complaint/inquiry contact information, full transaction details, and fees including conversion charges

Applies to

licensed undertakings (virtual currency business licensees under the Virtual Currency Business Act 2018)

Deadlines

• thirty days: Minimum prior notice a client must receive before a material change to the terms and conditions of services provided by the licensed undertaking

Related documents

• This document is made under Virtual Currency Business Act 2018