Bermuda: A New Sanctuary for Cryptocurrency?

HashKey Global, a prominent player in the cryptocurrency industry, has launched its latest venture – a global exchange based in Bermuda. This move puts HashKey on par with Coinbase, signaling a significant expansion from its roots in Hong Kong to the global arena.

In a discussion with Bloomger on April 8, Ben El-Baz, Managing Director of HashKey Global, shed light on the company’s decision to establish its exchange in Bermuda. This decision followed Coinbase’s successful acquisition of a Bermuda license, highlighting the island’s favorable regulatory environment for cryptocurrency exchanges. It’s considered a crucial step for HashKey in its efforts to expand its global presence.

The downfall of FTX in 2022 heightened awareness among exchange users about counterparty risks. El-Baz sees an opportunity for HashKey Global to blend Binance’s superior user experience with Coinbase’s strict regulatory framework.

HashKey Global aims to become the “largest globally compliant exchange in the world” within five years, surpassing competitors like Coinbase International. Unlike its Hong Kong-based counterpart, HashKey Global will not serve markets in Hong Kong, China, the United States, and others.

Funds from a significant Series A funding round, which boosted its valuation to over $1.2 billion, will fuel expansion across various business domains, including asset management and blockchain-based services.

Over the next six months, HashKey Global plans to offer a range of services, including spot and futures trading, staking, and a project launchpad, ensuring deep market liquidity through partnerships with liquidity providers and market makers.

While specifics of the financial investment in HashKey Global’s Bermuda venture weren’t disclosed, El-Baz emphasized the exchange’s robust capitalization and Bermuda’s stringent capital requirements for licensed entities. This underscores HashKey Global’s commitment to regulatory compliance, positioning itself as a secure and innovative platform in the global cryptocurrency market.

Cryptocurrency Regulation in Bermuda

In 2024, Bermuda has emerged as a leader in blockchain and cryptocurrency regulation. The Digital Asset Business Act (DABA) and the Digital Asset Issuance Act (DAIA) provide a legal framework for businesses and issuances in the digital asset space, ensuring clarity and security while meeting high international standards.

Bermuda’s government has also introduced initiatives like the Insurtech Sandbox and a unique digital asset bank licensing regime to foster innovation while ensuring regulatory compliance. Efforts like launching a blockchain-based stimulus token and developing technology projects underscore Bermuda’s ambition to become a global hub for blockchain and cryptocurrency. The Bermuda Monetary Authority (BMA) actively engages with the global financial innovation community, facilitating a collaborative approach to innovation and adaptation in the rapidly evolving digital asset landscape.