Following on from 21CRYPTOS’ previous article on a legal firm that’s set up a committee to help affected QuadrigaCX users recover their missing money, Bermuda’s Premier, David Burt has spoken out and said that if the beleaguered cryptocurrency exchange had been based in Bermuda instead of Canada, the funds would have been safe. The situation that arose when the exchange’s 30-year-old founder, Gerald Cotten, died taking the only passwords to the cold wallets with him to the grave, would not have occurred. Cotten was solely responsible for the wallets and corresponding keys and the exchange has been unable to access its cold wallets where most of its assets are kept.
Speaking to Fortune’s Balancing the Ledger, Bermuda’s Premier, David Burt said: “If Quadriga was licensed under the Bermuda Monetary Authority, what has happened would not have been able to happen, because we have rules regarding the custody of master keys and making sure they’re not held by a particular individual”.
The legislative framework that came into effect last summer to encourage fintech and crypto businesses to set up on the island is what is behind his remarks. The Digital Asset Business Act 2018 “basically states what you have to do with the master keys, how those things have to be handled, and making sure that they cannot be lost, or if they are lost, there’s a way for that recovery to happen,” he explained.
The Future Belongs To Countries That Can respond To Emerging Trends
Bermuda, a British Overseas Territory in the North Atlantic Ocean, who enact their own laws, is known for its blockchain and crypto-friendly attitude. They announced earlier in the year that they are setting up a bank that will accept crypto and blockchain companies.
Premier Burt said at the time: “Our traditional banks, those household names, have played their part in this community over many years.It is a fact of business and a fact of life that survival and growth can only be achieved through an ability to evolve and innovate”.
He added that legacy industries the world over have lost that ability, and the future belongs to those who can quickly lay a foundation for growth, respond to emerging trends and preserve a reputation for sound management in the process. For countries, it is no different. “Bermuda must be nimble or we will be left behind”.
Although the small island country is seeking to attract fintech businesses, they will need to pass a “very stringent test” in order to prevent failures like Quadriga.
“We recognize that any reputational damage from scams or otherwise can have an impact on our traditional financial services sector,” Burt said, “and we don’t want that, I would call it, cross-contamination”.