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Cryptocurrency Reporting Requirements a Gray Area in British Virgin Islands

As the use of cryptocurrencies continues to grow globally, the reporting requirements surrounding these digital assets remain unclear in the British Virgin Islands (BVI).

Uncertainty in Reporting Thresholds and Requirements

Currently, there are no established reporting thresholds or requirements for payments made with cryptocurrency in the BVI. The Beneficial Ownership Secure Search System Act 2017 (BOSS) does require BVI companies and their registered agents to record information about beneficial ownership on a central government-controlled database. However, it remains unclear whether these rules apply to cryptocurrency assets.

Definition of Beneficial Ownership

Beneficial ownership is defined as control tests, including:

  • Share ownership
  • Voting rights
  • The right to remove a majority of the board of directors
  • The exercise of significant influence and control over a company

Estate Planning and Testamentary Succession

The use of cryptocurrencies for estate planning and testamentary succession is also limited in the BVI. If a deceased individual’s cryptocurrency is deemed an asset actually situated in the BVI, it cannot be transmitted to their heirs or beneficiaries until an application is made to the BVI High Court Probate Registry.

To deal with a deceased person’s cryptocurrency, a legal personal representative must be appointed and obtain the appropriate grant from the registry. This can be achieved through:

  • A Grant of Probate
  • A Grant of Letters of Administration

Uncertainty Surrounds Cryptocurrency Regulation

The lack of clarity surrounding reporting requirements and estate planning for cryptocurrencies in the BVI highlights the need for regulatory guidance. The BVI government may need to consider implementing specific rules or thresholds for cryptocurrency transactions to ensure transparency and compliance with anti-money laundering regulations.

Conclusion

As the use of cryptocurrencies continues to grow, it is essential that governments provide clear guidelines for the reporting and management of these digital assets. Until then, individuals and businesses operating in the BVI will need to navigate the uncertainty surrounding cryptocurrency regulation.

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