{"id":19183,"date":"2024-01-24T18:58:01","date_gmt":"2024-01-24T18:58:01","guid":{"rendered":"https:\/\/cryptolegal.in\/staging\/?page_id=19183"},"modified":"2024-05-06T14:18:22","modified_gmt":"2024-05-06T14:18:22","slug":"bvi","status":"publish","type":"page","link":"https:\/\/cryptolegal.in\/?page_id=19183","title":{"rendered":"BVI"},"content":{"rendered":"\t\t
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\n\n\t\t\t\t\t\n\t\t\t\t\t\t\tBVI<\/span>\n\t\t\t\n\t\t\n\t\t\t\n\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/span>\n\n\t\t\t\t\n\t\t<\/h3>\n\t\t\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t
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The British Virgin Islands (BVI) has been a popular and crypto friendly jurisdiction for many years. It provides an amiable regulatory framework and lax requirements with respect to KYC and AML compliances. Considering an increasing number of crypto companies incorporating in the jurisdiction and increasing pressure from the FATF, authorities decided to introduce the\u00a0Virtual Asset Service Provider (VASP) Act, 2022<\/a>. It has been designed to regulate the growing cryptocurrency industry within BVI and provide a framework for virtual asset service providers to operate within the jurisdiction.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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VASP Act, 2022<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The VASP Act has now been published and has come into effect from February 01, 2023. In this article, we will explore the key provisions of the VASP Act, 2022 and other recent regulatory changes in AML\/KYC requirements to understand what it means for the BVI and the crypto industry.<\/p>

As per the VASP Act, 2022, \u201cvirtual asset\u201d means a digital representation of value that can be digitally traded or transferred, and can be used for payment or investment purposes, but does not include<\/p>

(a) digital representations of fiat currencies and other assets or matters specified in the Guidelines; or<\/p>

(b) a digital record of a credit against a financial institution of fiat currency, securities or other financial assets that can be transferred digitally;<\/p>

This definition is wide and seems aligned with the FATF recommendations on virtual assets. Further, VASP is defined as a virtual asset service provider who, as a business, is registered under this Act to conduct one or more of the following activities:<\/p>

  1. exchange between virtual assets and fiat currencies;<\/li>
  2. exchange between one or more forms of virtual assets;<\/li>
  3. transfer of virtual assets;<\/li>
  4. safekeeping or administration of virtual asset; and<\/li>
  5. participation in, and provision of, financial services related to an issuer\u2019s offer or sale of a virtual asset.<\/li><\/ol>

    However, the definition specifically excludes persons providing ancillary, infrastructure, software development or network related services to rationalise the impact of the new Act.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Registration and Licensing<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    A person who wishes to act as VASP is required to apply to the Commission for registration to undertake such business in one or more of the following categories<\/p>

    (a)\u00a0\u00a0\u00a0to carry on the business of providing a virtual assets service.<\/p>

    (b)\u00a0\u00a0to engage in the business of providing a virtual assets custody service.\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/p>

    (c)\u00a0\u00a0\u00a0to operate a virtual assets exchange.<\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Registration related requirements<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    VASP Act requires the applicants to prepare and submit a comprehensive documentation providing details of various aspects of their proposed business activities. The application for registration must also contain,\u00a0inter alia<\/em>, the following information:<\/p>

    1. the names and addresses of the persons proposed as directors, shareholders and senior officers of the VASP;<\/li>
    2. the physical address in the Virgin Islands of the VASP;<\/li>
    3. the name and address of the auditor of the VASP, including the auditor\u2019s consent to act as such;<\/li>
    4. a business plan in relation to the VASP which should include detailed information relating to the nature, size and scope of the VASP, underlying technology to be used, human resources, outsourcing arrangements, initial capital and financial projections;<\/li>
    5. a written risk assessment of the VASP outlining the mechanism to identify, assess, monitor and control different risks; and<\/li>
    6. the system to be put in place on how the VASP will handle client assets, custodian relationships and customer complaints.<\/li><\/ol>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      Other Considerations<\/h3>