Today, we’re expanding our global offerings with the launch and regulatory licensing of a new subsidiary in Bermuda. We plan to serve non-US Poloniex customers with our new Bermuda operations, and we expect to offer many new digital asset services from Bermuda over time. We will also continue our existing operations in the US, Ireland, the UK, and Hong Kong.
While many governments around the world have not kept pace with the regulatory requirements driven by rapid innovation in digital asset businesses and crypto, Bermuda has leapt forward with an exceptionally well designed and comprehensive regulatory framework: the Digital Assets Business Act of 2018 (“DABA”). DABA provides a comprehensive framework for the regulation and oversight of crypto financial services including digital asset issuance, sale and redemption, exchange operations, and custodial services.
Circle is the first major crypto finance company to receive a Class F (“Full”) DABA license that covers the operation of payment services, custody, exchange, trading and other financial services that use digital assets. As a result, we’ll be able to deliver new innovations, including asset listings and trading services, to global customers while also staying true to our commitment to compliant, well-supervised operations and customer protections.
At the heart of DABA is the recognition that digital assets represent a new class of assets that cannot be shoehorned into legacy regulatory frameworks. A digital asset may function simultaneously as an investment contract, a commodity, a utility in a service, and a payment currency. This versatility is powerful. It creates novel forms of incentive alignment, financial returns and value for users. It even empowers organizations to re-think corporate structures and governance.
While the Bermuda regulatory framework enables technical and business innovation, it simultaneously enforces high regulatory and supervisory standards. DABA protects customers with stringent requirements for managing enterprise, cybersecurity and custody risks. The framework also actively guards against international criminal activity with one of the strongest regimes in the world for anti-money laundering (AML) and combating the financing of terrorism (CFT) in ways that are compliant with Financial Action Task Force (FATF) standards.
Bermuda’s pioneering approach is the kind of regulatory framework we’ve long advocated to unleash growth in the crypto industry. Moreover, we’ve witnessed first hand that the Bermuda government is prepared to iterate and evolve new regulatory rules alongside the pace of technical innovation in the crypto and blockchain field.
Unlocking Value for Customers
We believe digital asset and crypto innovation will create a new global financial system that is more efficient, equitable, and empowering. Breakthroughs such as fiat stablecoins, non-sovereign crypto currencies, tokenized securities, and smart contract platforms are already improving the financial system and hold incredible promise for the future. With our new operations in Bermuda, we’re accelerating our pursuit of this vision.
In the near term, non-US customers will use Poloniex through our new Circle International Bermuda entity. This transition will open the door for non-US customers to access an exciting roadmap of new capabilities we plan to release in the coming months including new crypto asset listings, advanced trading products, and other innovations.
Unfortunately, because of US regulatory limitations, we will not be able to offer many of these new services to US persons for now. However, we’re committed to serving US customers as best we can despite the constraints. We will also continue to advocate for changes to US policy and regulations so the US economy is not left behind by opportunities created from digital asset and crypto innovation.
Working With Bermuda
We’re excited to be opening a new office in Bermuda. We plan to grow our Bermuda staff to more than 30 people during the next two years, with roles including general management, risk, compliance, finance, trading, and customer operations.
In the course of selecting Bermuda as a new base for expanded international operations, we’ve had the privilege of working with Premier David Burt as well as a number of officials in the government and the Bermuda Monetary Authority. We’ve been deeply impressed by their embrace of the digital asset industry and their deep knowledge of our sector.
With a background in finance and technology, Premier Burt has boldly championed innovation that stands to make the global financial system more trustworthy, inclusive and empowering for billions of people. We’re confident that working with a visionary and highly-respected government partner will open the door to more growth and innovation.