British Virgin Islands Compliance Report

Regulatory Overview

Regulatory Status

Some rules exist but significant gaps; draft legislation or limited guidance

Key Regulator(s)

BVI Financial Services Commission, British Virgin Islands Financial Services Commission, FSC and Financial Investigation Agency

Primary Legislation

Virtual Assets Service Providers Act 2022: Enacted 2022, came into effect Februa, BVI Financial Services Commission Guidance on Regulation of Virtual Assets: Issu, VASP Act, Guidance on Regulation of Virtual Assets in the Virgin Islands: Issued by FSC in, No minimum capital specified in VASP Act; share capital based on operational exp, The BVI Securities and Investment Business Act (Revised ..., Securities and Investment Business Act

Travel Rule

Adopted — Threshold: Implemented

Key Facts

• aml Anti-Money Laundering Regulations, 2020 (AML Regulations/AMLR) (amended 2022/2024): Core rules on customer due diligence, reporting, and controls. Anti-Money Laundering and Terrorist Financing Code of Practice (AMLTFCoP/AMLTFCOP): Detailed AML/CFT/PF obligations for relevant businesses. Proceeds of Criminal Conduct Act (PCCA): Establishes money laundering prevention framework. UN and UK sanctions (extended to BVI) directly apply to BVI-incorporated bodies, residents, and relevant businesses like VASPs, requiring risk-based policies to screen customers against UN, UK, and extended EU lists. EU sanctions are not directly applicable but influence BVI via UK Sanctions Orders; BVI Financial Services Commission (FSC) mandates mechanisms to assess sanctions exposure. OFAC sanctions lack legal force in BVI but are practically required for VASPs with US exposure, including blocking virtual currencies linked to OFAC's Specially Designated Nationals (SDN) list, prohibiting unauthorized transactions, and reporting within 10 business days. VASPs and relevant persons screen applicants, customers, and relationships against active Sanctions Orders listed on BVI FIA and FSC websites. Upon identifying designated persons/assets: file reports with the Sanctions Unit (via Governor's Office), submit Suspicious Activity Reports (SARs) to FIA under the Counter-Terrorism Act, 2021, and freeze assets.
• custody Separate application for custody (US$10,000 fee); exchange activities need another. Applicants must demonstrate robust software infrastructure, share capital adequacy, and client asset protection measures. Ongoing compliance with AML/CFT laws, including Anti-Money Laundering Regulations, 2008, and related codes. Virtual Assets Service Providers Act, 2022: https://www.bvifsc.vg (implied FSC source) FSC Guidance on Regulation of Virtual Assets (2020): https://www.bvifsc.vg/library/guidance-regulation-virtual-assets-virgin-islands-bvi VASP Registration/AML Guidance (2023): FSC publications Regulatory Body: The BVI Financial Services Commission (FSC) – https://www.bvifsc.vg Primary Legislation: Virtual Asset Service Providers Act 2022 (VASP Act 2022). This legislation introduces a registration regime for entities providing custody of virtual assets. The FSC oversees and enforces under this act.
• general No minimum share capital currently mandated Share capital must align with the size and nature of operations Company must be incorporated in the British Virgin Islands Only registered BVI companies can obtain VASP licenses Local office not required, only a physical address in BVI Company must appoint an Authorized Representative – an FSC-approved individual or entity in BVI serving as the regulatory contact point Directors, senior officers, and compliance officer must meet FSC "fit and proper" criteria Directors and officers must provide passports and proof of residence
• licensing Purpose: Addresses global uncertainty in virtual asset regulation by confirming the FSC's position on when existing laws capture activities like trading, custody, or issuance of virtual assets in or from the BVI. Assessment Approach: Evaluates virtual assets based on their characteristics and business models, analogizing to regulated financial services to determine licensing requirements and avoid violations. Scope: Applies to persons or entities engaging in virtual asset-related activities within the FSC's regulatory remit, urging review for compliance. Exchanges – platforms facilitating virtual asset trading Custody providers – holding and managing digital assets Payment processors – facilitating virtual asset transfers Other VASP services – storage and management of virtual assets Virtual Assets Service Providers Act 2022: Enacted 2022, came into effect February 1, 2023
• securities The British Virgin Islands has established a comprehensive regulatory framework for virtual asset service providers through the Virtual Assets Service Providers Act, 2022, which came into force on February 1, 2023, making crypto activities legal but regulated. Financial Services Commission The Financial Services Commission (FSC) serves as the primary regulator for virtual asset service providers in the BVI, overseeing licensing, compliance, and enforcement under the VASP Act. Financial Services Commission Licensing is mandatory for businesses engaged in virtual asset services including exchange, transfer, custody, and certain financial services involving virtual assets, though the Act contains specific exemptions for certain activities. Financial Services Commission The regulatory framework is operational and enforceable, with the FSC actively processing license applications and conducting supervision of VASP activities. Financial Services Commission The practical reality is that while the BVI has created a specialized licensing regime for VASPs, digital asset securities may also fall under traditional securities regulation administered by the Financial Services Commission's Securities and Investment Business Division. Financial Services Commission Regulatory Body: The Financial Services Commission (FSC) is the primary regulator for virtual assets and securities in the British Virgin Islands, operating under the Financial Services Commission Act. Financial Services Commission Primary Law - VASP Act: The Virtual Assets Service Providers Act, 2022 (the "VASP Act") is the cornerstone legislation governing virtual asset service providers in the BVI, establishing licensing requirements and compliance obligations. Financial Services Commission Secondary Law - Securities Legislation: The Securities and Investment Business Act (SIBA) governs securities and investment business in the BVI, and digital assets that qualify as securities may be subject to this legislation in addition to or instead of the VASP Act. Financial Services Commission
• stablecoin Interests in collective investment schemes (e.g., mutual funds). Instruments with equity rights, debt creation/acknowledgment (debentures), warrants for stock purchase, certificates conferring rights, options, futures, or contracts for differences. Securities: Tokens with equity/profit-sharing, debt-like features, or derivative references (e.g., value tied to business performance). Non-securities (virtual assets under VASP Act): Standard utility/payment tokens, cryptocurrencies, stablecoins, governance tokens, and NFTs as digital collectibles without investment rights. Issuance of non-security tokens is unregulated under VASP Act or SIBA.
• status Virtual Asset Service Providers Act, 2022 (VASP Act): Enacted in 2022 and effective February 1, 2023. Establishes licensing for VASPs, aligns with FATF AML/CFT standards, and defines regulated services (e.g., exchange, transfer, custody). Existing VASPs had until July 31, 2023, to apply; new entities must register before operating. Guidance on Regulation of Virtual Assets: Issued by FSC in 2020. Clarifies applicability of existing laws to virtual asset activities, assessing factors like asset use and business analogy to traditional finance. Supporting laws include: Securities and Investment Business Act (SIBA), Financing and Money Services Act, 2009 (FMSA); Anti-Money Laundering Regulations, 2008 (AML Regs); and Economic Substance Act, 2018. VASP Act: https://www.bvifsc.vg/library/virtual-asset-service-providers-act-2022-bvi FSC Guidance: https://www.bvifsc.vg/library/guidance-regulation-virtual-assets-virgin-islands-bvi
• travel rule BVI Financial Services Commission (FSC) – Responsible for supervising VASPs and enforcing AML/CFT regulations. British Virgin Islands Financial Investigation Agency (FIA) – Enforces anti-money laundering and terrorist financing laws. Source: Virtual Assets Service Providers Act, 2022 21Analytics Anti-Money Laundering Regulations – Detailed regulatory requirements for VASPs. The BVI aligns with FATF recommendations, adopting a risk‑based approach to virtual assets and emphasizing compliance with the Travel Rule. Source: FATF Guidance on Virtual Assets FATF Any entity engaging in VASP activities (exchange, custody, transfer, issuance, etc.) within or from the BVI must register with the FSC under the Virtual Assets Service Providers Act, 2022. Exchange between virtual assets and fiat currencies.

Sources

• https://fiabvi.vg
• https://www.bvifsc.vg/international-sanctions/about-sanctions
• https://fiabvi.vg/Portals/0/ThemePluginPro/uploads/2023/3/27/Virgin%20Islands%20Sanctions%20Guidelines%20-2023.pdf
• https://sanctionssearch.ofac.treas.gov
• https://www.bvifsc.vg/sites/default/files/vasp_travel_guidance_f.pdf
• https://www.bvifsc.vg
• https://www.bvifsc.vg/library/guidance-regulation-virtual-assets-virgin-islands-bvi
• https://www.bvifsc.vg/amlcft
• https://www.bvifsc.vg/terms/regulated-entities/custody-providers-vasp
• https://www.bvifsc.vg/beneficial-ownership
• https://oboluslaw.com/jurisdictions/bvi/custody-arrangements-for-funds-in-british-virgin-islands/
• https://xavioncapital.com/resources/company-formations/bvi-custody-provider
• https://chambers.com/content/item/6867
• https://www.fatf-gafi.org/media/fatf/documents/recommendations/FATF-Recommendation-15.pdf
• https://www.bvifsc.vg/library/legislation/securities-and-investment-business-act-revised-2020
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• https://laws.gov.vg/Laws/securities-and-investment-business-act
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• https://bvi.gov.vg/travel-protocols
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• https://fsc.go.kr/eng/index
• https://www.bvifsc.vg/library/legislation/securities-and-investment-business-act-revised-2016
• https://www.bvifsc.vg/library/legislation/virtual-asset-service-providers-act-2022
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• https://www.bvifsc.vg/
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• https://www.bvifsc.vg/sites/default/files/virtual_assets_service_providers_act_2022.pdf
• https://www.21analytics.co/travel-rule-regulations/british-virgin-islands-bvi/
• https://www.bvifsc.vg/sites/default/files/anti-money_laundering_and_terrorist_financing_code_of_practice.pdf
• https://www.bvifsc.vg/sites/default/files/anti-money_laundering_regulations.pdf
• https://www.bvifsc.vg/sites/default/files/financial_services_commission_act.pdf
• https://www.fatf-gafi.org/publications/guidance-notes/virtual-assets.html
• https://www.fatf-gafi.org/