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On 9 September 2022, the British Virgin Islands (“BVI”) Government published a draft Virtual Assets Service Providers Act (“VASP Act”) for consultation with industry. The draft VASP Act introduces a new, detailed registration and supervision framework for virtual assets service providers (“VASPs”) operating in or from within the BVI, in keeping with the requirements of the Financial Action Task Force (“FATF”).
The draft VASP Act sets out the virtual assets services that will require registration of a VASP with the BVI Financial Services Commission (“FSC”), the registration and ongoing requirements for VASPs, and broad supervisory powers for the FSC.
The virtual assets services and business activities that will require registration as a VASP under the draft VASP Act include:
The proposed registration requirements for VASPs include:
A proposed VASP will also be able to take part in the FSC's regulatory sandbox if it wishes to carry on a virtual assets service and provide innovative FinTech in relation to the service.
The draft VASP Act includes a six month grandfathering period for existing providers of virtual asset services to apply for registration with the FSC.
The proposed ongoing obligations for registered VASPs include:
Broad powers are included for the FSC to supervise VASPs, together with offences and penalties of up to US$100,000 and / or five years imprisonment for breach of the Act.
The draft VASP Act is a welcome addition to the BVI regulatory regime, in line with international standards for VASPs. A copy of the draft VASP Act is available on the FSC website and comments can be made on it to the FSC until 23 September 2022. We will provide further updates once the VASP Act is finalised and adopted in the BVI.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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