Centralized exchange in Barbados

Primary Legislation: Digital Assets Act, 2019 (as amended).

Regulatory Body: The Financial Services Commission (FSC) Barbados is the primary regulator responsible for licensing, supervision, and enforcement under the Digital Assets Act.

Required License: A Virtual Asset Business License.

The claim that this activity falls under definitions (1) and (2) of ‘Virtual Asset Business’ is now incorrect due to the November 2025 revision of the Virtual Assets & VASP Act in Barbados.

Legal Entity and Local Presence:

The applicant must typically be a Barbadian incorporated company or a foreign company registered in Barbados.

A registered office in Barbados.

The Act may imply or require key management personnel to be resident in Barbados, or at least regular physical presence for operational oversight.

The Digital Assets Act mandates that a VASP must maintain adequate financial resources to operate its business.

Requirement: Any person wishing to operate a digital asset business that provides custodial wallet services in Barbados must obtain a license from the Financial Services Commission (FSC).

Definition of Digital Asset Business (DABA Section 2): Includes "providing custodial wallet services" (defined as "the safekeeping or control of a client's digital assets or the means to access a client's digital assets").

DABA Section 13(1)(a): "A licensee who receives client digital assets for safekeeping or for any other purpose shall keep client digital assets separate from the licensee’s assets."

DABA Section 13(1)(b): "A licensee shall hold client digital assets in an account or a wallet designated as a client digital assets account or wallet."

DABA Section 13(2): "A licensee shall maintain adequate insurance cover or other indemnity arrangements to protect clients against the loss of digital assets held by the licensee arising from fraud, negligence or other risks."

DABA Section 13(1)(c): "A licensee shall implement appropriate measures to safeguard client digital assets, including measures for the prevention of theft, loss or manipulation."

A "qualified custodian" in Barbados, under DABA, is essentially a licensee (an entity licensed under DABA to provide custodial wallet services) that adheres to all the obligations outlined in the Act, particularly those in Section 13. These obligations include asset segregation, insurance, and robust security measures.

Virtual Asset Business Act, 2022 (VABA, 2022): This is the cornerstone legislation specifically designed to regulate VASPs in Barbados. It provides for the registration, licensing, supervision, and regulation of virtual asset businesses, bringing them squarely under the AML/CFT regime. It aligns Barbados's regulatory framework with FATF Recommendation 15 on new technologies.

Identity Verification: Obtaining and verifying the identity of the customer (individual or legal entity) using reliable, independent source documents, data, or information.

Beneficial Ownership Identification: Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of the customer, especially for legal persons and arrangements. This includes understanding the ownership and control structure.

Ongoing Monitoring: Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of the relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds or virtual assets.

Enhanced Due Diligence (EDD): Applying enhanced measures for higher-risk situations, including:

Simplified Due Diligence (SDD) may be applied only where a documented, demonstrably low risk of money laundering or terrorist financing exists, in line with FATF and similar risk-based frameworks; it is not a blanket permission defined solely by the FSC and must follow proportionate, dynamic risk assessment criteria set by applicable AML regulators.

Obligation to Report: VASPs are legally obligated to report any suspicious transactions, including attempted transactions, to the Financial Intelligence Unit (FIU) of Barbados.

Copies of identification documents, verification data, beneficial ownership information, and records of analysis performed.

Adopted: Yes, Barbados has adopted legislation to regulate Virtual Asset Service Providers (VASPs) and incorporate AML/CFT obligations consistent with FATF recommendations, including the principles underlying the Travel Rule.

The Virtual Asset Business Act, 2019 in Barbados does not explicitly outline penalties under Part VIII – Offences and Penalties as stated; the available evidence only confirms a $125,000 fine without referencing this specific part.

Section 18 of the Act requires licensees to keep records that are "sufficient to reconstruct individual transactions" and to retain information to identify customers, originators, and beneficiaries.

Therefore, all licensed entities performing these functions in Barbados are subject to the AML/CFT obligations, including those related to the Travel Rule.

Regulator: Barbados Financial Services Commission (FSC)

Digital Assets Act, 2019: This is the foundational legislation for regulating digital assets and VASPs in Barbados. It outlines licensing requirements, supervisory powers of the FSC, and penalties for non-compliance.

FSC Public Warnings: The FSC frequently issues general warnings to the public about dealing with unregulated entities and the risks associated with various financial products, including those related to cryptocurrencies. While these aren't enforcement actions against a specific entity with a fine, they are a form of regulatory action aimed at consumer protection and highlight the FSC's vigilance. For specific warnings, you would need to browse their 'News & Updates' or 'Public Notices' sections, but these usually warn against types of scams or the dangers of unlicensed activity rather than sanctioning a named, operating entity with a fine.