VASP Regulation

The BVI Financial Services Commission has implemented a new law called the Virtual Assets Service Providers Act, 2022 (VASP Act) to regulate and oversee Virtual Assets Service Providers (VASPs) operating within and from the Virgin Islands. The VASP Act comes into effect on February 1, 2023.

To provide better understanding of the regulations governing VASPs, we have compiled a list of questions and answers for you.

1. What are the criteria that determine whether a company is a VASP and therefore requires to comply with the BVI AML regime?

   
   The following activities/operations on behalf of another person fall under VASP and therefore require registration:

   • Exchange between virtual assets and fiat currencies.
   • Exchange between one or more other forms of virtual assets.
   • Transfer of virtual assets.
   • Safekeeping or administration of virtual assets or instruments enabling control over virtual assets.
   • The participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset.
   • Other activity or operation as may be specified by the VASP Act.
2. What are the documents that are required to proceed with the registration as a VASP and complying with the BVI AML regime?

   
   The application form must include:

   • the physical address of the VASP in the BVI.
   • the names and address of the directors and senior officers.
   • the names and address of the shareholders, including shareholding.
   • the name and address of the VASPs auditor.
   • the name and address of the authorized representative.
   • a business plan which includes areas specified by the act.
   • a written risk assessment.
   • a regulatory compliance manual.
   • the proposed internal safeguards and data protection systems.
   • the proposed system for handling client assets, custodian relationships and complaints.
   • details of the applicant’s legal advisers.
   • any other information the FSC considers appropriate.
3. What are the timelines for the document submission and approval procedures?
   
   Initial comments within 6 weeks and registration process to be completed within 6 months.
4. What are the steps to be followed in the registration procedure?
   
   Step 1 – Preliminary VASP analysis.
   
   Step 2 – Compile all documents required for the application.
   
   Step 3 – Submit application to the BVI Financial Services Commission (FSC).
   
   Step 4 – FSC reviews application and responds to applicant with any follow-up comments.
   
   Step 5 – FSC concludes application process within six months.
5. What are the deadlines for registration and filings required?
   
   31 July 2023. This deadline is for companies who have already started business operations prior to the Act becoming effective.
6. What are the respective fees to be paid to relevant government authority?

   Category Registered	Making the Application	Annual Renewal
   VASP	USD 5,000	USD 7,500
   Virtual assets custody service	USD 10,000	USD 15,000
   Virtual assets exchange	USD 10,000	USD 25,000

7. Other information
   
   Kindly refer to the links below for additional information:
   BVI Virtual Asset Service Providers Act 2022