What is the Virtual Asset Provider Act of the British Virgin Islands (BVI)?

This Act establishes the legal foundation for registering and overseeing Virtual Asset Service Providers (VASPs) that conduct business in or out of the Virgin Islands.

It applies to all BVI organizations dealing with virtual assets, including custodial, brokerage, and cryptocurrency exchanges.

A VASP: What is it?

A company that provides any of the following services to third parties is known as a VASP:

• Trading virtual assets for real money
• Changing a virtual asset type for another
• Transferring digital assets on someone else’s behalf
• Keeping or overseeing virtual assets
• Offering financial services associated with virtual asset sales
• Any more actions listed in the VASP Act or associated rules

Generally, a business that issues its digital tokens is not considered a VASP. Nonetheless, it can be categorized as one if it provides services for other issuers. VASP custodians, who protect virtual assets, are likewise covered by the Act.

Which services do not qualify for registration?

The following services are not eligible for VASP registration:

• Supporting infrastructure, such as cloud storage or the verification of signatures
• Serving only as an unhosted wallet provider or software developer
• Developing or marketing virtual asset platforms or software solutions
• Supplying a virtual asset network with auxiliary services that don’t entail helping others

Are you unsure if your Company meets the requirements? Contact us if you need advice.

What license requirements exist in the BVI for VASPs?

According to the BVI, prior to the Act’s implementation, firms offering VASP services had a six-month grace period until July 31, 2023, to register. Directors or senior executives who permit operating without registration risk fines of up to $100,000 or potentially five years in prison.

The essential steps for VASP registration are as follows:

• Send your application to the BVI Financial Services Commission (BVI FSC) using the authorized form. For further information, see the BVI FSC website.
• Make sure your application has all the necessary paperwork and expenses.
• A local service provider, legal counsel, or Authorized Representative
• must submit the application on the Company’s behalf.
• If you intend to operate a virtual assets exchange or provide virtual assets custody services, be ready to submit extra documentation to demonstrate your ability to manage client assets and reduce risks.
• Depending on the calibre of your application, the BVI FSC hopes to provide preliminary feedback within six weeks of receiving it.

After I register my VASP, what comes next?

A BVI VASP is required to keep up the following after registering:

• Two directors who satisfy the fit and appropriate requirements of the BVI FSC, one of whom might have to be physically present at the BVI
• An Authorized Representative to serve as the FSC’s liaison
• Within 14 days of registration, a qualified and recognized auditor must be appointed and notified to the FSC.
• A compliance officer who satisfies the BVI FSC requirements and has the requisite training and expertise.

Have more questions?

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