British Virgin Islands -- Custody Regulations Regulatory Overview

The British Virgin Islands (BVI) regulates cryptocurrency/digital asset custody primarily through the Virtual Assets Service Providers Act, 2022 (VASP Act), effective February 1, 2023, administered by the BVI Financial Services Commission (FSC). Custody services qualify as a regulated "virtual asset service," requiring providers (VASPs) to register with the FSC.[2][3][4][5]

Custodial License Requirements

Providing virtual asset custody—defined as hosting wallets or maintaining custody/control over another person's virtual asset, wallet, or private key—requires VASP registration with the FSC.[3][4][7]

• Separate application for custody (US$10,000 fee); exchange activities need another.[3]
• Applicants must demonstrate robust software infrastructure, share capital adequacy, and client asset protection measures.[3]
• Ongoing compliance with AML/CFT laws, including Anti-Money Laundering Regulations, 2008, and related codes.[1][3]
  Pre-2022, custody was unregulated unless classified as securities under the Securities and Investment Business Act, 2010 (SIBA).[1][2]

Segregation of Client Assets Rules

Client assets must be segregated and identifiable per VASP Act regulations to protect against commingling with the custodian's own assets.[3]

Insurance/Bonding Requirements

Search results do not specify mandatory insurance or bonding for VASPs; focus remains on capital requirements and asset protection infrastructure during licensing.[3] No explicit rules identified.

Cold Storage Mandates

No explicit mandates for cold storage in the results; custody approvals emphasize overall infrastructure security and client protection, but specifics are regulator-assessed.[3]

Qualified Custodian Definitions

The VASP Act defines regulated custodians as VASPs registered with the FSC for custody services, without a separate "qualified custodian" category. Prior FSC Guidance (2020) assessed activities against existing laws like SIBA if beyond exchange medium.[1][4][5][8]

Pending Custody Legislation

No pending legislation noted in results as of 2025 publications; framework relies on VASP Act, 2022, plus FSC guidance (e.g., VASP AML Guide, VASP Registration Guidance, both February 1, 2023) and 2020 Virtual Assets Guidance.[4][5][8] Earlier sandbox (Financial Services (Regulatory Sandbox) Regulations, 2020) supported testing.[5]

Key regulatory references (no full texts hosted; official FSC site recommended for latest):

• Virtual Assets Service Providers Act, 2022: https://www.bvifsc.vg (implied FSC source)[2][3][4][5]
• FSC Guidance on Regulation of Virtual Assets (2020): https://www.bvifsc.vg/library/guidance-regulation-virtual-assets-virgin-islands-bvi[1][8]
• VASP Registration/AML Guidance (2023): FSC publications[4]