DeFi protocol frontend 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.

A virtual asset business (or Virtual Asset Service Provider, VASP) is generally understood under FATF‑aligned frameworks as any person or entity that, AS A BUSINESS, conducts one or more covered virtual‑asset activities (such as exchange, transfer, safekeeping, or related financial services); many jurisdictions extend this to persons carrying on such activities in or from their territory, and it does not necessarily hinge on acting only ‘for or on behalf of another person.’

Exchange between virtual assets and fiat currencies.

Exchange between one or more forms of virtual assets.

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.

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.

Money Laundering and Financing of Terrorism (Prevention and Control) Act, 2011-23 (as amended) is Barbados's overarching AML/CFT legislation. Other sectoral statutes, including the Virtual Asset Service Providers regime (VABA), require covered entities to comply with the AML/CFT obligations set out in this Act for financial institutions and designated non‑financial businesses and professions (DNFBPs).

VASPs must be licensed or registered by the FSC to operate legally in Barbados. This process involves demonstrating robust internal controls, governance structures, and adequate financial resources, including a sound AML/CFT compliance program.

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:

VASPs must determine the source of funds and source of wealth for high-risk customers.

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

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a report has been made or that a money laundering/terrorist financing investigation is being conducted.

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

Regulator: Barbados Financial Services Commission (FSC)

Entity Targeted: Implicitly, any Virtual Asset Service Provider (VASP) operating or attempting to operate in Barbados without a license, or failing to comply with the Digital Assets Act, 2019 and associated regulations. The FSC also targets the general public with warnings about the risks of unregulated entities. Violation Type: Operating an unlicensed VASP, failure to meet AML/CFT requirements, consumer protection breaches by unregulated entities.

Penalty amounts for operating without a license under Barbados’s digital assets regime have been increased by later amendment; the 2019 figures cited in the claim are no longer current.

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.