BVI Virtual Assets Service Providers Act 2022 (VASP)
The BVI has put into force the Virtual Assets Service Providers Act, 2022 (The VASP Act). The VASP Act introduces a new supervision and regulation for virtual assets service providers carrying out certain business activities in or from within the BVI.
Any entity wishing to provide virtual asset services in or from within the BVI is now required to be registered by the FSC. New entities must register with the FSC before commencing any VASP activities. They have until 31 July 2023 to submit an application to the FSC or cease its VASP related activities. All new businesses must apply for the licence prior to formation.
When a license is approved by the FSC they will issue a certificate of registration. They could possibly impose such conditions as they see appropriate for example obtaining a professional indemnity insurance.
The VASP Act defines a virtual asset service provider who provides, as a business, a virtual assets service and is registered to conduct one or more of the following activities or operations for or on behalf of another person:
- exchange between virtual assets and fiat currencies;
- exchange between one or more forms of virtual assets;
- transfer of virtual assets, where the transfer relates to conducting a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another;
- safekeeping or administration of virtual assets or instruments enabling control over virtual assets;
- participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset; or
- perform such other activity or operation as may be specified in the VASP Act or as may be prescribed by regulations.
A person engaged in any of the following activities or operations, for or on behalf of another person, will be deemed to be carrying on a virtual assets service:
- hosting wallets or maintaining custody or control over another person’s virtual asset, wallet or private key;
- providing financial services relating to the issuance, offer or sale of a virtual asset;
- providing kiosks (such as automatic teller machines, bitcoin teller machines or vending machines) for the purpose of facilitating virtual assets activities through electronic terminals to enable the owner or operator of the kiosk to actively facilitate the exchange of virtual assets for fiat currency or other virtual assets; or
- engaging in any other activity that, under the Guidelines, constitutes the carrying on of the business of providing virtual asset service or issuing virtual assets or being involved in virtual asset activity.
Crypto based derivative products would require more careful consideration and may be caught by one or both the VASP Act or the Securities and Investment Business Act (SIBA).
The VASP Act sets out a number of on-going obligations for VASPs which include:
- maintaining records that (a) are sufficient to show and explain its transactions, (b) enable its financial position to be determined with reasonable accuracy, (c) enable it to prepare all necessary financial returns and statements, (d) enable its financial statements to be audited, (e) show any complaints made by clients and (f) show the steps it takes to guard against money laundering, terrorist financing and proliferation financing;
- submitting a copy of its auditor’s report to the FSC within 6 months of the end of its financial year;
- ensuring that client assets are identified, or identifiable, and appropriately segregated and accounted for;
- co-operating with the FSC to ensure compliance with the VASP Act, and providing the FSC with any documents or information it may require to discharge its functions; and
- obtaining the FSCs prior written approval to any proposed change of name, disposal of any significant interest in the VASP or changes to its functionaries.
We have attached the FSC guidance for you to review PDF Download. We recommend that clients speak to a lawyer so they can obtain advice on the correct way forward about the license. We have a lawyer that we can refer you onto however CFS Formations will not be able to deal with the license application or any ongoing obligations in relation to the license.
Testimonial
"I am very impressed with the service that CFS provided for the setup of my Seychelles Company. They made the process very easy and straight forward. I would recommend using CFS"
Individual, Norway
