CRYPTOCURRENCY REGULATION AND COMPLIANCE IN THE BRITISH VIRGIN ISLANDS GETS A MAJOR OVERHAUL
Overview of the Changes
The British Virgin Islands (BVI) has made significant strides in aligning its cryptocurrency regulations with international standards. The BVI government has enacted amendments to the Anti-Money Laundering law, bringing crypto businesses under existing AML regulations. Additionally, a new licensing regime for Virtual Asset Service Providers (VASPs) is proposed through the Virtual Asset Service Provider Bill.
Key Developments
- Amendment to Anti-Money Laundering Law: Crypto companies in the BVI will be required to comply with stricter AML/CFT requirements, including:
- Appointing a money laundering reporting officer (MLRO)
- Establishing policies and procedures for AML/CFT compliance
- Providing training to staff
- Virtual Asset Service Provider Bill: The bill proposes a specific regulatory licensing regime for VASPs, requiring them to register with the Financial Services Commission and meet obligations such as anti-money laundering, data protection, and cyber security requirements
Impact on Crypto Companies in the BVI
The new regulations mean that crypto companies operating in the BVI will need to adapt to stricter AML/CFT requirements. The amendment law comes into effect on December 1, 2022, while the VASP licensing regime is expected to be enacted by the end of 2022 or early 2023.
- Compliance Requirements: Crypto companies must comply with these regulations to avoid penalties and reputational damage.
- Benefits of Adaptation: Companies that adapt to these changes can benefit from a more stable regulatory environment and increased investor confidence
Impact on the BVI as a Crypto Jurisdiction
The introduction of VASP regulations is expected to reduce jurisdiction-hopping as projects seek a jurisdiction with clear guidance and an efficient licensing process. The BVI’s reputation as a leading crypto jurisdiction will likely remain intact, but companies may need to adapt to the new regulatory landscape.
Support for Crypto Companies
Cavenwell 3.0, a crypto specialist corporate services provider and consultant, is offering support for crypto companies navigating these changes. Their team can assist with:
- Assessing compliance requirements
- Understanding options for relocation
- Creating policies and procedures to ensure smooth transition