Bermuda has established a comprehensive regulatory framework for Digital Asset Businesses, aligning with global anti-money laundering and counter-terrorist financing standards.
Under the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations (POCR) and the Digital Asset Business Act (DABA), entities providing digital asset services are treated as payment service providers and must comply with the Travel Rule.
Bermuda’s Travel Rule requires regulated financial institutions to ensure transparency in fund transfers by collecting and sharing specific customer information, applying a robust risk-based approach, and implementing enhanced due diligence measures for higher-risk transactions.
What is the scope of the Travel Rule in Bermuda?
“Any Regulated Financial Institution (RFI) including an RFI conducting Digital Asset Business (DAB), that provides services for the transfer of digital assets (virtual assets), money transmission, or other transfer of funds, is a payment service provider (PSP) engaging in a wire transfer and is subject to the rules for wire transfers set forth in POCR Regulations 21 through 31A and Chapter 8: Wire Transfers”. [Annex VIII.148 Sector-Specific Guidance Notes (SSGN) for Digital Asset Business]
Particularly, any person or entity offering any of the following activities to the public falls under the Travel Rule:
The issuing, selling, or redeeming of digital assets, including ICO administration or coin/token design (except when issued solely to fund one’s own operations).
Operating as a payment service provider, i.e. businesses transferring funds using digital assets.
Operating a digital asset exchange, a marketplace for issuing, distributing, converting, or trading digital assets for fiat or other digital assets.
Providing digital asset trust services, including acting as a fiduciary, agent, or trustee for digital asset management.
Providing custodial wallet services, i.e. storing or maintaining clients’ digital assets or wallets (beyond just developing wallet software).
Operating a digital asset derivative exchange, issuing or clearing options, swaps, or futures involving digital assets.
Operating as a digital asset services vendor, authorised to transact, hold power of attorney, make markets, or administer digital asset benchmarks.
Who is the supervisory body for VASPs in Bermuda?
What is the Travel Rule threshold in Bermuda?
USD 1000
For transfers under this threshold, RFIs must still collect originator identity details, though verification is recommended rather than mandatory when no business relationship exists.
How to comply with Bermuda's Travel Rule and meet AML requirements
originator's name,
originator's account number,
originator's address or national identity number, customer identification number or date and place of birth in if the originator is a natural person,
beneficiary’s name,
beneficiary’s account number.
[Annex VIII.149 Sector-Specific Guidance Notes (SSGN) for Digital Asset Business]
Enhanced due diligence needs to be applied in the following situations:
transactions involving high-risk jurisdictions,
sanctioned persons,
non-face-to-face customers,
non-Bermuda correspondent banks,
politically exposed persons (PEPs), or
unusual transaction patterns.
Substitutions for this information are permitted only in limited, justified cases, which must be documented. Moreover, if the required information is missing, incomplete, or meaningless, the originator VASP must reject the transfer, request the missing data, or file an internal suspicious activity report (SAR).
Does Bermuda's Travel Rule apply to self-hosted wallets?
Self-hosted wallets are currently outside the scope of Bermuda’s Travel Rule.
When do you need to comply with the Travel Rule in Bermuda?
Now
Which regulations are applicable to Bermuda's Travel Rule?
Bermuda Monetary Authority: Digital Asset Business
