BVI Embraces Blockchain Revolution with New Amendments

The British Virgin Islands (BVI) has taken a significant step towards embracing the blockchain revolution by introducing new amendments to its Anti-Money Laundering (AML) Code, effective December 1, 2022.

A New Standard for AML Verification

The revised code will set a new standard for AML verification in the region, demonstrating the BVI’s commitment to staying at the forefront of financial innovation. Under the changes, certain virtual asset services will now be classified as “relevant business,” subjecting them to reduced thresholds for one-off transactions.

Implications for the Virtual Asset Industry

This development is expected to have significant implications for the virtual asset industry, particularly for companies that operate in the BVI. The move aims to promote a more streamlined and efficient approach to AML verification, reducing regulatory burdens on businesses while maintaining robust anti-money laundering measures.

FSC’s Oversight Approach

The Financial Services Commission (FSC), which provides oversight for investment funds and entities caught by the Securities Investment Business Act (SIBA), has maintained its supervision approach while embracing new technologies. The FSC’s efforts are aimed at promoting the development and use of blockchain technology in the BVI, particularly in relation to products offered to retail investors.

BVI Finance’s Role

BVI Finance, a group that represents the BVI’s financial services sector, is actively engaged with industry stakeholders, regulators, and government agencies to promote the adoption of new technologies. The organization plays a crucial role in shaping the regulatory environment and ensuring that the BVI remains a competitive and attractive destination for fintech companies.

Court Decisions on Complex Cryptocurrency Issues

In addition to these developments, the BVI has seen significant progress in its courts’ ability to understand complex cryptocurrency issues. Recent judgments have demonstrated the court’s willingness to address the unique challenges posed by digital assets, including the granting of relief against persons unknown and the use of alternative methods for service outside the jurisdiction.

Tax-Neutral Jurisdiction

The BVI is also a tax-neutral jurisdiction, with no direct taxes imposed on registered entities. However, beneficial owners may still be subject to tax implications in their home jurisdictions.

Sustainability and ESG Requirements

In terms of sustainability, there are currently no ESG/sustainable finance requirements that apply to digital assets in the BVI. However, as the industry continues to evolve, it is likely that such requirements will become increasingly important.

Data Protection Act

The BVI Data Protection Act (DPA) came into force in July 2021 and provides a standard framework for both public and private entities in managing personal data. While there are some key differences between the DPA and other jurisdictions’ data protection laws, the BVI’s approach is generally considered more light-touch than others in the region.

Conclusion

Overall, these developments demonstrate the BVI’s commitment to embracing the blockchain revolution and staying at the forefront of financial innovation. As the industry continues to evolve, it is likely that the BVI will remain a key player in shaping the regulatory environment and promoting the adoption of new technologies.