Self-custodial wallet / non-custodial software in British Virgin Islands

Purpose: Addresses global uncertainty in virtual asset regulation by confirming the FSC's position on when existing laws capture activities like trading, custody, or issuance of virtual assets in or from the BVI.

Assessment Approach: Evaluates virtual assets based on their characteristics and business models, analogizing to regulated financial services to determine licensing requirements and avoid violations.

Other VASP services – storage and management of virtual assets

Scope: Applies to persons or entities engaging in virtual asset-related activities within the FSC's regulatory remit, urging review for compliance.

Virtual Asset Service Providers Act, 2022 (VASP Act): Core law requiring registration/licensing for VASPs; effective February 1, 2023. Covers exchange, transfer, custody, and related services but excludes mere issuance of virtual assets.

VASP Registration: Mandatory for VASP activities; submit in the FSC's approved form, specifying the category, with a business plan, details of directors/senior officers/compliance officer (meeting fit and proper criteria), AML/CTF/PF policies, and application fee.

Incorporate a BVI Business Company (BVIBC): Unique name, registered agent, registered office; minimum 1 director initially (at least 2 individual directors post-registration; FSC may require local director).

Fit and proper person requirements for senior officers and beneficial owners

Prior FSC approval of senior officer appointments

Anti-Money Laundering Regulations, 2020 (AML Regulations/AMLR) (amended 2022/2024): Core rules on customer due diligence, reporting, and controls.

Threshold Amounts: USD 0—all virtual asset transactions, with no de minimis threshold.

Appointing an AML compliance officer (approved by the FSC) to oversee adherence and liaise with authorities, plus a Money Laundering Reporting Officer (MLRO) to handle internal reporting; notify FSC within 14 days if MLRO ceases office and apply for replacement approval within 21 days.

VASPs and relevant persons screen applicants, customers, and relationships against active Sanctions Orders listed on BVI FIA and FSC websites.

OFAC sanctions lack legal force in BVI but are practically required for VASPs with US exposure, including blocking virtual currencies linked to OFAC's Specially Designated Nationals (SDN) list, prohibiting unauthorized transactions, and reporting within 10 business days.

Upon identifying designated persons/assets: file reports with the Sanctions Unit (via Governor's Office), submit Suspicious Activity Reports (SARs) to FIA under the Counter-Terrorism Act, 2021, and freeze assets.

Retaining records (e.g., IP addresses, wallet details, transaction hashes) per the BVI Data Protection Act for AML/CFT/PF purposes.

Submitting governance documents like AML/CFT manuals, cybersecurity policies, and business continuity plans during registration.

Technical Implementation Requirements: VASPs must implement controls for Travel Rule compliance, including documented AML/CFT policies, procedures, continuous customer due diligence (CDD), transaction monitoring, and sanctions screening within 24 hours (e.g., freezing assets, reporting). They must demonstrate reasonable steps for compliance and align with FATF's risk-based approach, reporting to the FSC and Financial Investigation Agency (FIA).

Breaches (e.g., contravening or circumventing sanctions) are criminal offenses: up to 6 months imprisonment or ~US$5,000 fine (summary conviction); up to 7 years imprisonment or unlimited fine (indictment).