Circle to Base International Operations From New Bermudan Entity

Samuel Haig

On July 22, Circle announced that it has launched a new subsidiary in the self-governing British Overseas Territory of Bermuda.

The company stated that it plans to “serve non-US Poloniex customers” from its Bermuda operations, with the transitional process planned for the coming weeks. Despite the shift toward its new Bermudan entity, Circle plans to continue its existing operations in the United States (US), Hong Kong, the United Kingdom, and Ireland.

Circle was granted a ‘Class F’ license under the Bermudan Digital Assets Business Act of 2018 (DABA), with the Circle describing itself as “the first major crypto finance company” to receive the permit. The company plans to expand the staff at its Bermuda office to more than 30 within the next two years.

Circle also expects that non-US customers will be able to use Poloniex via the Circle International Bermuda entity in “the near term.”

Circle Praises Bermudan Cryptocurrency Regulations

In a statement, Circle commented Bermuda’s regulatory apparatus pertaining to cryptocurrencies, describing the DABA as “an exceptionally well designed and comprehensive framework” that recognizes that “digital assets represent a new class of assets that cannot be shoehorned into legacy regulatory frameworks.”

The company added that the DABA “enables technical and business innovation” while also enforcing “high regulatory and supervisory standards,” including “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.”

Gus Coldebella, Circle’s chief legal officer, told Forbes that the company considered several different jurisdictions before deciding that Bermuda was “a perfect fit.” Mr. Coldebella stated:

Under the DABA license, Circle will be able to operate a suite of regulated crypto financial services for our international customer base, including expanded digital asset product offerings.

Circle also commended the Bermudan premier, David Burt, and officials from the Bermuda Monetary Authority for their “embrace of the digital asset industry,” adding “We’re confident that working with a visionary and highly-respected government partner will open the door to more growth and innovation.”

Premier Burt welcomed Circle to Bermuda, stating: “We look forward to working closely with Circle [...]  We believe we have established a top standard of regulatory confidence which will help guide other jurisdictions on how to appropriately manage the risks associated with this industry while reaping the rewards offered by the efficiencies and opportunities that will be driven by the digitization and democratization of finance.”

1.9 Million U.K. Residents Own Cryptocurrencies, FCA Research Finds

Research conducted by the United Kingdom’s Financial Conduct Authority (FCA) has found that 1.9 million U.K. residents currently own cryptocurrencies, while 2.6 million are estimated to have bought crypto “at some point.”

The research report published by the FCA into how consumers interact with cryptocurrency markets in the U.K. found that 3.86% of the country’s general adult population owns cryptocurrencies, as its adult population is estimated to be of approximately 50 million people.

To the FCA, there was a “statistically significant increase” in cryptocurrency holders throughout the UK as last year roughly 3% of the country’s adult population owned crypto at some point, and is now up to 5.35%. The rise brings to the total number of U.K. residents who ever held crypto up to 2.6 million, up from 1.5 million.

While the amount of adults owning crypto is relatively small compared to the total adult population, industry awareness appears to have hit a new high, as 73% of polled adults revealed they have heard of cryptocurrencies, up from 42% last year.

According to the FCA’s research, however, 75% of the 1.9 million people that currently hold crypto in the U.K. have less than £1,000 (around $1,230) in the space, with 83% of them buying their assets via exchanges that are not based in the U.K. Those who do buy crypto are nevertheless aware of the risks, per the FCA.

The report notes most “seem to understand the risks associated with the lack of protections, the high volatility of the product and have some understanding of the underlying technology. The report adds this isn’t the case for all:

Nevertheless, the lack of such knowledge among some presents potential consumer harm to consumers. 11% of current and previous cryptocurrency owners thought they were protected. This amounts to approximately 300,000 adults.

The most common reason for U.K. consumers to purchase crypto, it adds, was as a “gamble that could make or lose money.”

Crypto Ads' Influence 

The FCA’s report also found that 45% of current and former cryptocurrency holders had seen cryptocurrency-related ads. A total of 35%, around 400,000 people, said the crypto-related ads made them more likely to invest in the space.

Overall, 16% of those who have had or currently have cryptocurrencies revealed they have been influenced by crypto-related ads. The report, however, also claims the “media’s role in raising consumer awareness about cryptocurrencies has risen.”

As CryptoGlobe reported earlier this year, the FCA added nine new financial crypto companies to its warning list, as it has been ramping up efforts to keep consumers safe even if they are investing in the crypto space. Cryptocurrencies are not covered by consumer protections.

Featured image via Pixabay.