Effective 1 February 2023, the British Virgin Islands Financial Services Commission (“BVI FSC”) has enacted the Virtual Asset Service Providers Act, 2022 (“VASP Act”). The VASP Act creates the legal framework for the registration, supervision and regulation of virtual asset service providers (“VASP”) operating in and within the BVI. Entities wishing to conduct VASP activities are now required to be registered with the BVI FSC. BVI entities operating as VASP prior to the enactment of the VASP Act have until 31 July 2023 to submit an application for a VASP licence while new entities are required to register before commencing any VASP activities.
VASP Activities
The VASP Act defines virtual asset service as a business conducted, on behalf of another person, and engaged in the following activities:
- 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 or prescribed by regulations in the VASP Act.
In addition, the below activities are also considered as a virtual asset service under the VASP Act:
- 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 asset 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.
Virtual asset or token issuances are currently not covered by the definition of virtual asset service activities and hence are not an activity regulated by the VASP Act.
VASP Categories
The VASP may apply for registration under the following categories provided under the VASP Act:
- To carry on the business of providing virtual assets service
- To engage in the business of providing virtual assets custody service
- To operate a virtual asset exchange
How to apply?
For details on the application and registration as a VASP, please refer to the BVI FSC’s Guidance here.
Functionaries of VASP
The VASP, subject to certain exceptions, should have the following functionaries at all times:
- Directors and Senior Officers – at least two individual directors
- Authorised Representative
- Compliance Officer
- Auditor
For additional information of the VASP Act and audit services required, please contact Nigel MacPhail.