Stablecoin issuer / redeemer in British Virgin Islands

Non-securities (virtual assets under VASP Act): Standard utility/payment tokens, cryptocurrencies, stablecoins, governance tokens, and NFTs as digital collectibles without investment rights. Issuance of non-security tokens is unregulated under VASP Act or SIBA.

Securities: Tokens with equity/profit-sharing, debt-like features, or derivative references (e.g., value tied to business performance).

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.

Virtual Assets Service Providers Act 2022: Enacted 2022, came into effect February 1, 2023

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

Payment processors – facilitating virtual asset transfers

SIBA Licensing: Required if virtual asset activities involve defined investments (e.g., exchanges), unless excluded under SIBA Schedules 2 (Parts A/B/C).

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).

Applicants must provide audited financial projections and proof of sufficient capital to sustain operations.

No minimum capital specified in VASP Act; share capital based on operational expenses.

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.

British Virgin Islands Financial Services Commission (FSC): Oversees all virtual asset service provider (VASP) registration, licensing, supervision, enforcement, and compliance monitoring, including AML/CFT obligations and transaction reporting.

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

Anti-Money Laundering and Terrorist Financing Code of Practice (AMLTFCoP/AMLTFCOP): Detailed AML/CFT/PF obligations for relevant businesses.

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

Adoption and Legislation: The Travel Rule integrates FATF Recommendations 15 and 16 into BVI law via Sections 19(4), Part VA, and Sections 41B through 41F of the AMLTFCoP, alongside the AMLR and Virtual Assets Service Providers Act, 2022 (VASP Act). Official guidance is in the BVI FSC's VASP Travel Rule Guidance (PDF: https://www.bvifsc.vg/sites/default/files/vasp_travel_guidance_f.pdf).

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.

UN and UK sanctions (extended to BVI) directly apply to BVI-incorporated bodies, residents, and relevant businesses like VASPs, requiring risk-based policies to screen customers against UN, UK, and extended EU lists.

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.

OFAC extraterritoriality impacts global VASPs dealing with US persons or assets.

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.

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).

Fit and proper person requirements for senior officers and beneficial owners

Prior FSC approval of senior officer appointments

Data protection and cyber security requirements

Annual financial reporting to the FSC