New VASP licensing rules affecting recovery in Bermuda – offshore & corporate

Bermuda's digital-asset licensing regime has tightened. Claimants who assumed offshore structures in Bermuda would remain opaque now face a changed environment – one that cuts both ways.

New virtual-asset service provider (VASP) licensing requirements in Bermuda impose stricter beneficial ownership disclosure obligations on licensed entities. For recovery practitioners, this creates usable choke points: licensed VASPs must maintain records that are accessible on proper legal process, and those records can support asset tracing, freezing order applications, and disclosure orders against custodians holding assets for unidentified defendants.

This alert covers what changed, who is affected, and what to do now if funds are held in or routed through Bermuda.

What Changed in Bermuda's VASP Licensing Rules

As of early 2026, Bermuda requires VASPs – exchanges, custodians, and token-issuance platforms operating from or into the jurisdiction – to hold a licence and maintain auditable beneficial ownership records for their customers. The licensing obligation applies to entities that were previously operating in a grey zone, including structures that placed digital assets behind nominee-held corporate wrappers.

The practical effect is significant. A VASP that previously resisted disclosure on the ground that it held no formal customer-identification data can no longer take that position if it is licensed and regulated. Regulators have the power to compel production of records. Claimants can use that regulatory architecture to support a Norwich Pharmal order or a Bankers Trust order directed at the VASP or its correspondent custodian.

Beneficial ownership registers – which Bermuda has maintained for corporate entities for some time – now interact more directly with VASP licensing data. That overlap is exploitable when tracing assets that have moved from a fiat account into digital-asset custody.

Who Is Affected?

The change matters most to three groups.

• Claimants chasing assets held in Bermuda-registered digital-asset structures. The new rules mean licensed VASPs cannot validly obstruct a properly served disclosure order by claiming ignorance of the underlying beneficial owner.
• Insolvency practitioners dealing with estates that include Bermuda-based crypto holdings. Where a debtor or director routed value into a VASP account behind a nominee company, that structure is now more vulnerable to disclosure and unwinding.
• Referring lawyers assessing whether a Bermuda enforcement angle is viable. The licensing regime makes Bermuda a more attractive enforcement forum than it was two years ago – but timing still matters.

Asset tracing that was previously stalled at the "identify the owner" stage now has a workable route through the VASP's compliance records, provided the application is made promptly and in the correct form.

What to Do Now

Speed is the variable most likely to determine outcome. Dissipation does not wait for licensing reform to bed in. If funds are held, or were recently held, within a Bermuda VASP structure, the following sequence applies.

First, confirm whether the VASP in question holds or has held a Bermuda licence. A licensed entity is subject to the disclosure regime; an unlicensed one may require a different approach through the courts.

Second, assess whether a without-notice application for a disclosure order – a Norwich Pharmal order or a Bankers Trust order – is viable in the Bermuda courts. Without-notice applications are measured in hours to days; any delay that allows the defendant to move assets narrows the window materially. We routinely coordinate proceedings with local counsel in Bermuda for exactly this step.

Third, if there is any prospect of the defendant moving assets out of Bermuda, consider a worldwide freezing order to restrain dissipation across jurisdictions. Bermuda courts have historically been responsive to well-evidenced urgent applications, and the new licensing data strengthens the evidential base available to a claimant.

Fourth, use VASP licensing records alongside the UBO register to build a complete ownership picture. Piercing the corporate veil or unwinding a nominee arrangement requires evidence of the true beneficial owner – that evidence is now more accessible than before.

The steps above describe the general practice for recovery in Bermuda. Your matter turns on the specific facts: where the assets are today, how the VASP is structured, and whether the defendant has received any indication that a claim is coming. A confidential case review tells you whether it is worth moving immediately. Contact us at info@axiomtracel.com.

About Axiom Trace

Axiom Trace is an independent boutique focused on cross-border and crypto asset recovery. We trace assets that have moved across borders or on-chain and coordinate their freezing and recovery – working with defrauded principals, insolvency practitioners, and the lawyers and funders who refer them. We work lawfully and within applicable sanctions regimes, alongside local counsel where proceedings must be filed. In our experience, the difference between a recoverable matter and an unrecoverable one is often measured in days, not months. We identify beneficial owners, test whether structures can be unwound or pierced, and coordinate the disclosure and freezing applications that follow. To discuss a matter, contact info@axiomtracel.com.

For broader context on offshore corporate structures and asset recovery, see our Offshore & Corporate insight series. For jurisdiction-specific guidance, visit our Bermuda jurisdiction page. For a related structure analysis, see our article on trust structures and asset recovery in Malta.

Disclaimer: This publication is for general information only and is not legal advice, nor a promise or prediction of recovery. No outcome is guaranteed. Asset recovery depends on the specific facts and on the law and procedure of each relevant jurisdiction, where local admitted counsel must act. Axiom Trace assumes no liability for actions taken or not taken based on this material. For advice on your situation, contact info@axiomtracel.com.