Centralized exchange in Saint Kitts and Nevis

Currently, there is no specific license required for a purely crypto-to-crypto exchange in St. Kitts and Nevis under a dedicated VA law.

However, if the exchange facilitates conversion between virtual assets and fiat currency (e.g., XCD, USD), or accepts fiat deposits/withdrawals, it would likely be considered a Money Services Business (MSB).

Potential License: A Money Services Business License would be required, regulated by the FSRC under the Money Services Business Act.

Money Services Business Act, 2000 (as amended): This act governs businesses that transmit or convert money.

Financial Services Regulatory Commission (FSRC) Website: While they don't list crypto licenses, they regulate MSBs.

For a Money Services Business License, there are specific capital requirements, typically involving a minimum paid-up capital and/or a bond. (Details would be in the MSB Act or accompanying regulations, usually requiring a minimum capital of XCD 100,000 or similar).

Requirements: Comprehensive Know Your Customer (KYC) procedures, transaction monitoring, suspicious activity reporting (SARs), appointment of an AML Compliance Officer, staff training, and record-keeping.

Virtual Assets Business Act, 2020 (Part II - Licensing and Regulation of Virtual Assets Business)

Section 3: Defines "virtual assets business" to include "custody of virtual assets or instruments enabling control over virtual assets."

Section 4: Mandates that "A person shall not carry on a virtual assets business in or from Saint Christopher and Nevis unless that person holds a licence granted by the Commission under this Act."

Section 17(1): "A licensee shall hold virtual assets belonging to its customers in separate accounts from the licensee’s own assets."

Section 17(2): "A licensee shall designate customer property as such and ensure that customer property is not commingled with the licensee’s own property."

Section 17(3): Further states that customer virtual assets "shall not be made available to creditors of the licensee, nor shall it be subject to liquidation, bankruptcy, or any similar proceedings against the licensee."

Section 18(1): "A licensee shall, at all times, maintain insurance coverage or a bond for the full market value of the virtual assets under its custody or control."

Section 19(1): "A licensee shall implement appropriate security measures to protect virtual assets under its custody or control from theft, loss or unauthorised access."

Section 19(2): "The licensee shall establish and maintain a risk management framework that includes measures to identify, assess, monitor, and mitigate risks relating to the safekeeping of virtual assets."

Section 19(3): Specifies that the security measures must cover "custody of private keys" and "access control," strongly implying secure offline storage for private keys.

Saint Kitts and Nevis VASPs are generally expected to comply with these FATF-aligned thresholds as part of their broader AML/CFT obligations under the VABA and the Anti-Money Laundering Act (2020 Revised Edition), as amended. It is advisable to consult the latest guidance from the Financial Services Regulatory Commission (FSRC) for any specific local interpretations or thresholds.

Collect and Verify Information: Implement robust Know Your Customer (KYC) and Customer Due Diligence (CDD) procedures to collect and verify the required originator and beneficiary information for all virtual asset transfers above the prescribed threshold.

Transmit Information: Establish mechanisms to transmit the required originator and beneficiary information to the beneficiary VASP (or to the relevant authority if the beneficiary is an unhosted wallet). This implies the need for interoperable solutions, such as those being developed by industry consortia (e.g., TRISA, Sygna, VerifyVASP, etc.), though the law does not mandate a specific technology.

Virtual Asset Business Act, 2020: While a direct, stable public URL from the Saint Kitts and Nevis government gazette is often hard to find, the Act can typically be sourced via the Financial Services Regulatory Commission (FSRC) or through legal databases. The FSRC is the primary regulatory body.

Anti-Money Laundering Act (2020 Revised Edition): This Act, along with its regulations, provides the overarching AML/CFT framework that VASPs must comply with.