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British Virgin Islands: The Jurisdiction of Choice for Cryptocurrency and Blockchain Businesses

In recent years, the British Virgin Islands (BVI) has emerged as the go-to jurisdiction for cryptocurrency and blockchain companies seeking to establish corporate structures. Many leading players in the industry, including BitFinex, Kraken, and FTX, have opted for BVI companies due to the numerous benefits they offer.

Why Choose the British Virgin Islands?

The BVI’s ease of incorporation, 0% taxation, and flexible accounting requirements make it an attractive option for blockchain and crypto businesses. Companies can be established in a matter of days following customer due diligence, with no requirement to prepare or file financial statements. This is particularly beneficial for companies that struggle to prepare traditional financial statements but have easy access to on-chain transactional activity.

A Regulatory Haven

One of the key reasons why the BVI has become a hub for cryptocurrency and blockchain businesses is its lack of specific laws or regulations governing crypto activity. Instead, the jurisdiction relies on existing Banking & Financial Services laws and regulations to determine whether an activity is licensed or regulated. This has allowed innovative projects to get to market quickly without the burden of a licensing process.

How BVI Companies are Used by Crypto and Blockchain Projects

  • BVI companies are commonly used as token issuance vehicles, responsible for issuing project tokens and entering into SAFTs with venture capital funds.
  • They may also be established as operators of smart contracts, such as NFT marketplaces or decentralized exchanges (DEXs).
  • In some cases, a BVI company is combined with a foundation to manage the project’s treasury and govern its token.

Expert Assistance

Cavenwell provides a range of services for Web 3 projects, including:

  • Assessing the suitability of the BVI for proposed activities
  • Incorporating companies
  • Arranging legal advice from BVI lawyers
  • Opening cryptocurrency exchange, fiat banking, and payments accounts
  • Establishing multi-jurisdictional corporate structures in key crypto jurisdictions like the Cayman Islands and Panama

Seeking Specialist Advice

While this article provides general guidance on the benefits of the British Virgin Islands for cryptocurrency and blockchain businesses, it is essential to seek specialist advice about your specific circumstances from a qualified lawyer or financial advisor.