Bermuda Monetary Authority’s New Digital Asset Custody Code of Practice Draft Releases
The Bermuda Monetary Authority, the most important financial regulator in the country, has recently decided to release a draft regulation that will be used to determine how crypto custodial services should work in the country.
This official document has been named Digital Asset Custody Code of Practice and it was created as a way to clarify for the companies how the regulator views custodial services and how they should protect the assets of their clients.
With a detailed regulatory framework for offering custodial services with crypto, the document explains both on the business and technology side how to manage the custody in a legal way. The document was created with the greater goal of ensuring that the assets of the clients will be protected and that the companies are aware and clear on the set of responsibilities that they have.
On the document, one can find information about how to handle transactions in the safest possible way, how to operate hot and cold storage at the same time and how to report incidents and generate keys.
The regulatory agency has affirmed that all the assets belong to clients should be segregated from the ones that are from the company itself to provide for more security.
It was also stated that the exchanges will be allowed to use indemnity insurance, other qualified custodians and to other measures to secure the money of the clients in case any incidents happen.
The Creation of a “Healthy Digital Asset Ecosystem”
Moad Fahmi, the senior advisor of financial technology in the Bermuda Monetary Authority (BMA), has affirmed that the main goal of this new framework is the creation of a “healthy digital asset ecosystem”. The BMA is concerned about the security of the assets, so showing the companies how to protect them is a good idea.
This, the Bermuda Monetary Authority believes, can encourage more people, especially wealthy. qualified investors, to invest in the region.
Recently, the BMA started consultation for the future of the crypto industry in the country, especially money laundering and similar issues. The governmental agency has also affirmed that it intends to keep a close eye on the market to curb illegal activities.