On-shore VASP in Brunei

No Specific VA Licensing Regime: There is no dedicated law or regulation in Brunei that specifically defines, regulates, or licenses virtual asset service providers (VASPs) for activities like operating crypto exchanges, providing crypto custody, or processing crypto payments.

In Brunei, cryptocurrency is illegal as of 2025, so any exchange facilitating fiat-to-crypto or crypto-to-fiat transactions is conducting an unauthorized, illegal activity rather than a licensed or permissible regulated activity.

VAs Not Legal Tender: Cryptocurrencies are not recognized as legal tender in Brunei.

AMBD Warnings: AMBD has consistently warned the public about the risks associated with investing in virtual currencies and participating in Initial Coin Offerings (ICOs), highlighting their speculative nature, volatility, lack of underlying value, and the absence of regulatory protection.

Custody Providers: If a custody provider holds fiat currency on behalf of customers, or offers services that resemble trust services or deposit-taking, it could potentially be subject to:

Local Presence: Yes, generally, a local physical presence and local management/board members are required for licensed financial institutions in Brunei.

Conservative Approach: Brunei's regulators are generally conservative. Operating in an unregulated space with high risk, without specific guidance from AMBD, carries significant legal and reputational risks.

Anti-Money Laundering and Counter-Terrorism Financing Order, 2011 (AMLO 2011): This is the foundational law that establishes the AML/CFT framework in Brunei. It defines reporting institutions, sets out obligations, and empowers AMBD as the supervisory authority.

AMBD AML/CFT Guidelines for Financial Institutions: While often general, AMBD has clarified that these guidelines, issued under the AMLO 2011, apply to VASPs. These guidelines provide detailed instructions on implementing the requirements of the AMLO 2011.

AMBD's Statement/Circulars on Virtual Assets: AMBD has issued public statements (e.g., "Statement on Virtual Assets") clarifying that virtual asset activities and VASPs fall within the scope of regulated financial activities for AML/CFT purposes. These statements emphasize compliance with the AMLO 2011 and FATF Recommendations, specifically Recommendation 15 concerning virtual assets.

Obligation to Report: VASPs are obligated to report any transaction (or attempted transaction) that they know, suspect, or have reasonable grounds to suspect is related to money laundering or terrorist financing.

Reporting Body: Reports must be submitted to the Brunei Financial Intelligence Unit (FIU), which operates within AMBD.

Duration: Records must be retained for at least five (5) years after the business relationship ends or after the date of the transaction. This ensures that records are available for audit, investigation, and analysis by competent authorities.

Implement robust internal AML/CFT policies, procedures, and controls.

Appoint a qualified Money Laundering Reporting Officer (MLRO).

Provide ongoing AML/CFT training to relevant employees.

Conduct independent audits of their AML/CFT programs.

"In cases where the transaction amount is BND 1,500 (Brunei Dollars) or more (or equivalent in other currencies or virtual assets), whether in a single transaction or several transactions that appear to be linked."

Brunei has not issued specific regulations permitting exchange between virtual assets and fiat currencies; virtual assets are not legal tender and no licensed exchanges for fiat conversion currently exist.

Penalties for Non-Compliance:

There are no specific licenses for standalone cryptocurrency or digital asset custodians in Brunei.