Financial Crime World

Third-Party Agreements and Estimation of Future Transactions: Cryptocurrency Regulation in the British Virgin Islands

The Financial Services Commissions (FSC) of the British Virgin Islands introduced the Virtual Assets Service Providers Law in 2022 to regulate the cryptocurrency industry. The law requires cryptocurrency-related companies to obtain a VASP license from the FSC to operate legally in and from the BVI.

Protection of Customer Assets

To ensure business continuity or cessation, licensed companies must have plans in place to protect customer assets and return funds in case of issues. This includes:

  • Clear guidelines on asset protection and management
  • Provisions for business continuity, including risk assessment and mitigation strategies
  • Procedures for ceasing operations, including notification of customers and regulatory authorities

AML-CTF Policies and Procedures

Licensed companies must also have robust AML-CTF policies and procedures in place to prevent money laundering and terrorist financing. This includes:

  • Identification and verification of customers and beneficial owners
  • Reporting suspicious transactions to the FSC
  • Conducting regular risk assessments and implementing mitigation strategies

Cybersecurity Framework

To ensure the security and integrity of customer data, licensed companies must have a comprehensive cybersecurity framework in place. This includes:

  • Encryption of sensitive data
  • Regular security audits and penetration testing
  • Employee training on cybersecurity best practices

Estimation of Future Transactions

The BVI is expected to continue to attract cryptocurrency-related businesses due to its business-friendly environment and lack of direct taxation on corporate income. The VASP license will provide a framework for these companies to operate legally and securely in the jurisdiction.

Alternatives to a Crypto License in British Virgin Islands

For those looking for alternative jurisdictions, our team has curated the following options:

  • 0% Taxes: A zero-tax jurisdiction with minimal requirements.
  • Fast Incorporation: A fast incorporation process with minimal compliance.
  • Well-Rounded Framework: A well-rounded framework with 0% tax on individual crypto trading.

About the Crypto License in BVI

To start a crypto licensed business in the BVI, you do not need to visit the jurisdiction as all processes can be conducted remotely. You will also need to have standardized documents and policies in place for AML/KYC purposes. The British Virgin Islands does not have any limitations on shareholders from certain countries, except for blacklisted individuals.

Conclusion

The VASP license in the BVI provides a comprehensive framework for cryptocurrency-related businesses to operate legally and securely in the jurisdiction. With its business-friendly environment and lack of direct taxation, the BVI is an attractive option for those looking to establish a presence in the cryptocurrency industry.