Fairly recently, I helped my Firm draft what was initially described then as our new “Fintech Onboarding” protocol. I’m the head of our Bermuda Fintech group. That’s really because I was involved in starting up our Fintech practice from the start. Well, Bermuda’s Fintech industry.
The start.
It began with my AppleWatch back in October 2017. “Can we chat tonight about a potential ICO, as I see you are a blockchain Bermuda blockchain lawyer?” I was standing in my kitchen, drinking a glass of wine.
I’m a blockchain lawyer?
Yeah. I had in my LinkedIn profile that one of my interests was fintech and blockchain. An easy Google search at that time of “Bermuda fintech blockchain lawyer” would have brought up my name, pretty easily.
I jumped on a call with the guy. It was the CFO of an e-gaming/sports company that wanted to do an ICO using an offshore vehicle and Bermuda seemed like the right jurisdiction. It was backed by some fairly heavyweight folks in the start-up industry, so after the call, I was immediately on a call with the Bermuda Business Development Agency.
It kinda went from there. I was hurled onto Bermuda Government committees, helping draft legislation, notwithstanding helping my actual clients.
It all moved too quickly. Memorandum of Understandings were signed between crypto entities and our Government, folks flew down to the Island, started to rent office space, and headlines were all over the place… the pressure for this new industry to take-off just out of the blue was… too much. The naysayers were everywhere (“Are you kidding???”).
Quality, not quantity
So, I rang Bermuda’s bells. Attending conferences, sitting on panels, speeches, and writing articles. The thrust is, and still is: this is a jurisdiction that does focus on wanting companies to set up here with an emphasis on quality over quantity.
When the Island’s industry was fledgling, my Firm had taken on a few ICO clients (the summer of 2018). The market was hot, but many of those start-ups ended up, well… broke. I tried to help as much as possible to get those set up, incorporated, and able to issue their tokens, but I was naive.
Well, ok, they were naive.
So, as a result, we lost revenue and by 2021, we wanted to try to fix it, to make sure we didn’t going forward, i.e. lose time and money. We wanted to put something into place. Some kind of protocol to help protect us from future mishaps. Understandable. We don’t want dodgy or potentially “we cannot pay you” clients.
Fintech?
First off, OK, yes, I’m the head of our Fintech practice.
Now, I don’t really like that word in this context.
“Fintech.”
I will use it because I know what it means. Many others don’t. It still makes me slightly uncomfortable.
Our onboarding policy was initially called “Fintech Onboarding.” I had to change our onboarding protocol to “Digital Asset Onboarding.” Not Fintech. Because fintech was being used everywhere across the Island. The growth of our “Bermuda Fintech” industry. I was also there, front and center.
What we are, and have always been, is an offshore island building a digital asset business industry. Crypto. Stablecoin. Perhaps looking forward, to DAO and DeFi. But, regardless, a jurisdiction that will remain one that is very well-regulated, respected, and demanding. Not for the naive.
Many clients want that now. They want to be regulated… and well-regulated.
This is 2022, not 2018.
Fintech is of course technology that seeks to improve and automate the delivery and use of financial services. It is so wide… digital banking services, mobile applications, AI/ML, education, regtech, etc. You could probably argue many more fall within its umbrella (I still like to argue that legaltech does!)
Yes, it includes insurtech (something which Bermuda now, as an industry, is working towards being a leading player in this space), and yes, it includes cryptocurrency (let’s not use the term “digital assets” anymore).
So, my Firm now has a new “Digital Asset Onboarding” policy.
It is a relief. Crypto onboarding is a totally different bucket than “Fintech”.
Chris Garrod, October 2022