BVI VASPs have six months to apply for licence under legislation now in force

Monday, 22 April 2024
The British Virgin Islands (BVI) Financial Services Commission (the Commission) has issued new guidance on the virtual assets legislation now in force. It requires all BVI-registered or incorporated entities to have a licence or certificate if they act as an intermediary or conduct regulated activities related to virtual assets.
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The relevant legislation, the Virtual Asset Service Providers Act 2022, was enacted at the end of 2022 but has only just been brought into effect. Section 40 of the Act states that a business providing a virtual assets service on the date it comes into force must apply to be licensed as a virtual asset service provider (VASP) within six months of that date. Assuming this deadline is met, the business can continue providing services until the Commission has given notice to approve or refuse their application, although they are nominally in immediate breach of the Act if they operate without a licence.

'It is important that these guidelines are followed to ensure against any violation of financial services laws as they relate to use of or trading in virtual assets in or from within the Virgin Islands', said the Commission. Proper regulation of the regime is necessary to guard against any reputational damage to the financial services industry and the territory, it added.

The Commission expects the need may arise to revise the guidelines and make recommendations to Cabinet of the BVI regarding amendments or revisions to the relevant financial services legislation where necessary. Where such action is taken, appropriate notification will be issued accordingly, it said.

Financial services minister Lorna Smith said the BVI is committed to 'fostering innovation while upholding the highest standards of regulatory compliance'. The VASP legislation was 'crafted to accommodate the dynamic nature of the sector while prioritising stringent regulatory requirements to mitigate risks effectively', she said in March 2024, adding that there will be consultation with industry leaders.

Several applications for VASP licences have already been received, the first three of which were approved by the Commission on 27 March 2024.

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