QuadrigaCX would have found a haven in Bermuda, says Premier Edward David Burt

The tale of the now-infamous Canadian cryptocurrency exchange, QuadrigaCX, would have ended a lot better if the exchange was based out of Bermuda, a leader of the North Atlantic island country said.

Edward David Burt, Bermuda’s Premier and leader of the Progressive Labour Party told Fortune that his country had a different set of rules for securing private keys and had QuadrigaCX been based out of Bermuda, the controversy it is now part of, would not have materialized.

He stated,

“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.”

Bermuda has been ramping up its efforts to attract blockchain and cryptocurrency companies to the island country. The passage of the Digital Assets Business Act in July 2018 and its attempts to build the financial technology sector was one of these efforts.

Through the act, the country also hoped to improve the regulatory framework around initial coin offerings [ICOs]. In light of the same, Burt stated,

“It 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.”

Several crypto-centric and blockchain focused companies have moved to Bermuda following the government’s eagerness to build the country’s fintech space. 74 fintech companies were incorporated in Bermuda at press time, including Omega Dark, the country’s first cryptocurrency exchange and a compliance-focused subsidiary of Binance.

Despite the enticing qualities of moving to a crypto-conducive country like Bermuda, Burt added that companies will have to clear a “very stringent test,” preventing the occurrence of any QuadrigaCX-like event. He called such an event collateral damage to a country’s regulatory framework, due to the misgivings of a single company’s “cross-contamination.”

Burt concluded,

“We recognize that any reputational damage from scams or otherwise can have an impact on our traditional financial services sector.”

QuadrigaCX has been engaged in a slew of financial and legal difficulties since its CEO Gerald Cotten passed away in December 2018. Since Cotten was the only one with information about the exchange’s private keys to their cold wallets, $190 million worth of crypto-holdings have been in a limbo.

According to a 5 March order from the Nova Scotia Supreme Court of Justice, the Canadian exchange was granted a 45-day extension to recover the missing crypto-assets. The next hearing is scheduled for 18 April, prior to which the creditors cannot legally charge QuadrigaCX.

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