Financial Crime World

Cryptocurrency and Financial Crime in British Virgin Islands: The Hidden Risks

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The rise of Initial Coin Offerings (ICOs) has brought a new wave of investment opportunities for businesses seeking to secure capital through cryptocurrencies, tokens, and virtual assets. According to the European Corporate Governance Institute, ICOs have garnered over $18 billion from January 2014 to June 2018.

The British Virgin Islands: A Hub for ICOs

The British Virgin Islands (BVI), an international finance center, has been actively positioning itself as a key player in the booming trend of capital raising through ICOs. BVI companies have gained traction as virtual asset issuers, with other IFCs also showing interest. However, the distinct advantages of utilizing BVI companies for creating and launching new cryptocurrencies have propelled the BVI to emerge as a central base for ICOs.

Tax Benefits

The BVI offers a favorable tax regime, providing no taxes on:

  • Corporate profits
  • Dividends
  • Capital gains

Additionally, the BVI does not impose value-added tax (VAT), making it an attractive option for businesses looking to raise funds through ICOs.

Investor Privacy and Confidentiality

Investor privacy and confidentiality are also top concerns for many businesses conducting ICOs. The BVI is known for its robust Data Protection and privacy laws, which provide confidence to investors. The BVI also allows service providers to:

  • Provide nominee shareholders
  • Act as directors

Presenting an additional layer of privacy and confidentiality.

Regulatory Environment

However, the regulatory environment for cryptocurrencies and virtual assets in the BVI is dynamic and evolving, resulting in new regulations or changes to existing ones over time. While the BVI has its regulatory frameworks that govern virtual asset issuers and service providers, it may still be challenging for investors unfamiliar with the BVI’s cryptocurrency regulations to understand:

  • Legal and regulatory requirements
  • Compliance obligations
  • Potential risks associated with crypto investments

Seeking Expert Guidance

To exercise prudence when investing in cryptocurrencies in the BVI and navigate through the intricacies of the country’s regulatory framework, investors are advised to seek expert guidance. Our team at Bolder Group has extensive experience in administering digital asset funds with cryptocurrency services such as:

  • Set-up and fund launch
  • Formulation of crypto trading strategies

Contact our BVI team to find out more about our compliance and governance solutions, including:

  • AML and outsourced KYC Compliance services
  • Provision of AMLCO, MLRO, and DMLRO
  • Automatic Exchange of Information (AEOI) reporting
  • Directorship and Officer services