Mountain Protocol is regulated by the BMA as a Class F licensee, issued under the Digital Asset Business Act 2018 of Bermuda. The legislation requires the issuer to custody collateral with pre-vetted custodians, segregate it from any corporate accounts, and ensure its return to customers in the event of a bankruptcy.

Further, the BMA has also published draft guidance for stablecoin issuers. This guidance outlines the regulator's expectations on asset segregation, bankruptcy remoteness, and custodial arrangements. If published, this will provide a more robust regulatory framework to protect USDM holders.

Previously, Mountain Protocol was granted a Class M license by the BMA. This is a temporary license that is typically offered to projects in a sandbox mode, but comes with scale restrictions and enhanced supervision from the BMA.

In July 2024, Mountain Protocol announced that it was upgraded to a Class F license by the BMA. This is a permanent license that is typically offered to projects that have demonstrated an effective compliance program and a proven business model. The upgrade is a vote of confidence from the BMA that reinforces the issuer’s ability to comply with regulations.