virtual assets

Who is caught

The primary instrument is the Virtual Assets Service Providers Act, 2022 (the VASP Act), which prohibits any person from carrying on a virtual assets service in or from the Virgin Islands without registration by the Financial Services Commission. The framework is supplemented by amendments extending the anti-money laundering regime, the Regulatory Code, the prudential returns regime and the fees regime to virtual asset activity.

Entities caught

• VASPs: Persons carrying on the business of providing a virtual asset service, including virtual asset custody service providers and operators of virtual asset exchanges (VASP Act; VASP registration guidance).
• Sandbox participants: Innovative FinTech participants approved under the VASP Act regulatory sandbox.
• AML relevant persons: Under the Anti-money Laundering (Amendment) Regulations, 2022, relevant business is extended to virtual assets service where a transaction involves virtual assets valued at $1,000 or more, bringing such providers within the AML regime from 1 December 2022.
• Registered VASPs: VASPs registered under section 7(1) of the VASP Act are added to Schedule 9 of the Financial Services (Prudential and Statistical Returns) Order and to the Regulatory Code's licence categories.

What brings a person in scope

• Virtual asset definition: The Proceeds of Criminal Conduct (Amendment) Act, 2021 expanded the definition of property to include virtual assets, defined as a digital representation of value that can be digitally traded or transferred and used for payment or investment; the AML Regulations carry parallel definitions of virtual asset, virtual assets service and VASP.
• Pre-VASP Act position: FSC guidance on the regulation of virtual assets explains that, under existing legislation, tokens carrying rights akin to shares, debentures, options or contracts for differences can be SIBA Schedule 1 investments, and pooled investment tokens may qualify as mutual funds, so servicing such tokens can require a SIBA investment business licence.
• Tax reporting scope: ITA guidance on the Common Reporting Standard and the CRS 2.0 / CARF notice indicate that crypto-linked financial instruments, e-money products and CBDCs are being brought within CRS financial account and financial asset definitions (CRS 2.0, effective from 2026), ahead of the separate Crypto-Asset Reporting Framework.

Sources: Guidance Notes on the Common Reporting Standard (CRS) · CRS 2.0 and CARF (2025-10-23) · Guidance on Regulation of Virtual Assets in the Virgin Islands (BVI) · Proceeds of Criminal Conduct (Amendment) Act, 2021 (No. 25 of 2021) · Anti-money Laundering (Amendment) Regulations, 2022 · Financial Services (Prudential and Statistical Returns) (Amendment) Order, 2024 · Regulatory (Amendment) Code, 2023 · Virtual Assets Service Providers Act, 2022

Key duties

The core duty is registration with the Commission before conducting virtual assets business, followed by continuing governance, filing, record-keeping and AML obligations. Deadlines that recur are the AML reporting officer notification, transitional registration cut-offs and annual filings.

Registration and application

• Registration: No person may carry on a virtual asset service, custody service or exchange in or from the Virgin Islands without registration by the Commission (section 5, VASP Act).
• Application content: Applicants must submit prescribed information on directors, senior officers, shareholders, controlling interests, business plan, risk assessment, AML/CFT compliance manual and data protection systems (section 6), plus supporting documentation on governance, capital, technological audits, custody and cessation/living-will plans per the FSC guidance.
• Authorised representative: Applicants must engage a registered Authorised Representative, who applies separately for approval (Form D).
• Application response: Per FSC guidance, applicants must respond to any FSC request for clarification within 30 days (or an extended period), failing which the application is treated as withdrawn.
• Transitional deadline: FSC guidance states existing VASPs operating before commencement had a six-month window and had to apply by 31 July 2023, failing which they are treated as conducting unauthorised business; the CEX Overseas advisory restates this cut-off.

Ongoing governance and filings

• Financial soundness and personnel: Maintain a financially sound condition (section 10), appoint suitable directors and senior officers (section 11), an authorised representative (sections 12-13), an auditor (sections 14-19) and a compliance officer with adequate systems and controls (section 41).
• Notifications: Notify the Commission of changes to registration information (section 8) and of any disposition or acquisition of a significant or controlling interest (sections 20-21); FSC guidance adds prior FSC approval for changes in ownership/control and directors/senior officers.
• Records and client assets: Maintain sufficient records including customer due diligence information for the prescribed period (section 22) and safeguard client assets (section 23); custody providers must safeguard client virtual assets and must not encumber client deposits without beneficial owner agreement (section 29).
• Conduct: Report information to the Commission and cooperate with it (sections 20, 26), avoid misleading advertising (section 24) and comply with AML/CFT requirements (section 25). Exchange operators face additional restrictions (section 32).
• Annual filings: FSC guidance requires registered VASPs to file annual returns, annual financial statements and annual compliance officer reports; the Prudential and Statistical Returns Order additionally brings registered VASPs within its returns filing requirements.
• Fees: Under the Financial Services (Fees) (Amendment) Regulations, 2023, VASP registration, approval and annual renewal fees apply once the VASP Act is in operation, with the guidance noting application fees of $10,000 for custody or exchange applicants and $5,000 for other VASPs.

AML/CFT obligations

• MLRO notification: Under the AML (Amendment) Regulations, 2022, relevant persons must notify the Commission (or the Agency) in writing within 14 days of appointing a Money Laundering Reporting Officer.
• Identity thresholds: Identity evidence must be obtained for one-off transactions at or above $15,000 generally, $3,000 for gaming and betting, and $1,000 for virtual assets service, including aggregated linked transactions.
• CDD and review: The AML/TF Code amendments set CDD thresholds (one-off transactions $15,000, wire transfers $1,000, other occasional transactions $3,000) and require non-high-risk customers to be reviewed within a four-year cycle prioritised by risk.
• Travel rule: Originating virtual asset service providers must obtain, verify and keep complete originator and beneficiary information for virtual asset transfers (section 41C, AML/TF Code).
• Suspicious transaction reports: Under the Proceeds of Criminal Conduct (Amendment) Act, 2021, suspicious transaction reports and disclosures must be made to the Financial Investigation Agency.
• Fit and proper: The Regulatory (Amendment) Code, 2023 brings VASPs within the Regulatory Code, requiring directors, senior management, significant owners and controllers to meet the Commission's fit and proper criteria.

Sources: Guidance on Application for Registration of a Virtual Assets Service Provider · Advisory Warning No. 1 of 2023 - CEX Overseas LTD (2023-06-06) · Proceeds of Criminal Conduct (Amendment) Act, 2021 (No. 25 of 2021) · Anti-money Laundering (Amendment) Regulations, 2022 · Anti-Money Laundering and Terrorist Financing (Amendment) Code of Practice, 2023 · Financial Services (Fees) (Amendment) Regulations, 2023 · Financial Services (Prudential and Statistical Returns) (Amendment) Order, 2024 · Regulatory (Amendment) Code, 2023 · Virtual Assets Service Providers Act, 2022

Exemptions and carve-outs

The instruments provide activity-based carve-outs under the pre-VASP Act guidance and threshold-based relief within the AML regime.

• Out-of-scope activities: FSC guidance on the regulation of virtual assets treats pure utility token issuances, ICO facilitation limited to utility tokens, passive personal holding of virtual assets via non-custodial software, and mining for one's own use as outside the regulatory remit.
• Money transmission: That guidance also states that, under the then current FMSA and Regulatory Code definitions, transmission of virtual assets did not itself require a money services business licence, though firms were urged to seek the Commission's views.
• Identity evidence thresholds: Under the AML (Amendment) Regulations, 2022, identity evidence is not required for one-off virtual assets transactions below $1,000 (subject to aggregation of linked transactions and an override where money laundering is known or suspected).
• Simplified due diligence: Relevant persons may apply simplified due diligence in qualifying low-risk cases, but not where a low-risk determination is inconsistent with national or competent-authority risk assessments.
• Transitional provision: The VASP Act addresses existing licensees under a transitional provision (section 40), and FSC guidance provided a six-month registration window for existing VASPs.
• CRS local filing: ITA guidance notes the Virgin Islands does not require local CRS filing for BVI tax residents, using the ITA as receiving jurisdiction only for NIL filings and undocumented accounts.

Sources: Guidance Notes on the Common Reporting Standard (CRS) · Guidance on Regulation of Virtual Assets in the Virgin Islands (BVI) · Anti-money Laundering (Amendment) Regulations, 2022 · Virtual Assets Service Providers Act, 2022

Enforcement and penalties

Enforcement is centred on the Commission's powers under the VASP Act and on penalties in the AML instruments, together with the FSC's use of public warning statements against unlicensed operators.

• VASP Act enforcement: The Commission has broad enforcement powers, including cancellation and revocation of registration, and the Act sets out a schedule of offences and penalties of fines up to $100,000 and/or up to five years imprisonment for corporate and individual contraventions of specified sections.
• AML Regulations fine: The AML (Amendment) Regulations, 2022 increased the maximum fine on conviction for an offence under regulation 17(1) to $150,000.
• AML/TF Code administrative fines: The 2023 AML/TF Code amendment added administrative fines ranging from $70,000 to $100,000 for failures to file suspicious transaction reports or to obtain, keep and provide originator/beneficiary information for virtual asset transfers.
• Cash seizure: The Proceeds of Criminal Conduct (Amendment) Act, 2021 empowers police and customs officers to seize and detain cash of not less than $10,000 where there are reasonable grounds to suspect a connection to criminal conduct.
• Unauthorised business: FSC guidance treats VASPs that missed the transitional application deadline as conducting unauthorised business subject to full enforcement action; the guidance on existing legislation similarly warns of enforcement for unauthorised financial services business.
• Public warnings: The FSC issues public statements and advisory warnings under sections 4(1)(l) and 37A of the Financial Services Commission Act, 2001 naming entities that are unlicensed or that circulate forged licences for crypto trading and investment (for example, CEX Overseas, Bybit, HitBTC, BIDESK.COM and others), to alert the public rather than to impose new duties on licensees.

Beyond these provisions, the indexed instruments do not set out a further comprehensive schedule of monetary penalties.

Sources: Guidance on Application for Registration of a Virtual Assets Service Provider · Guidance on Regulation of Virtual Assets in the Virgin Islands (BVI) · Public Statement 4 of 2026 - XENO PORTFOLIO LIMITED · Public Statement 21 of 2025 - EWC IMPERIAL CAPITAL LTD. (2025-10-29) · Public Statement 7 of 2025 - STABLEGROWTHCAPITAL (2025-03-24) · Public Statement 10 of 2024 - Cryptoaegis Invest (2024-05-02) · Public Statement 33 of 2023 - BITWEALTHEXCHANGE (2023-12-28) · Public Statement 30 of 2023 - HiTech Digital Business Ltd. (2023-11-09) · Public Statement 26 of 2023 - Bybit Fintech Limited (2023-10-18) · Public Statement 25 of 2023 - GAEA INVESTMENT (2023-09-25) · Public Statement 16 of 2023 - First Class Trading Solutions, Ltd. · Advisory Warning No. 1 of 2023 - CEX Overseas LTD (2023-06-06) · Public Statement 19 of 2022 - BIDESK.COM (2022-10-13) · Public Statement 6 of 2022 - CRYPTONEXTRADER (BVI) LTD. (2022-06-27) · Public Statement 26 of 2021 - UNIA TRADE AND INVEST. LIMITED (2021-10-11) · Public Statement 21 of 2021 - Cryptolivetrading.ltd · Public Statement 2 of 2021 - CRYPTOCENT.LIVE (2021-01-25) · Public Statement 23 of 2020 - BINARY CRYPTO EXCHANGE · Public Statement 4 of 2020 - MITRACRYPTO TRADE & FINANCE GROUP, INC. (2020-03-04) · Public Statement - MR. LEVERE WENT and FLOW MONEY SYSTEM (2018-04-19) · Proceeds of Criminal Conduct (Amendment) Act, 2021 (No. 25 of 2021) · Anti-money Laundering (Amendment) Regulations, 2022 · Anti-Money Laundering and Terrorist Financing (Amendment) Code of Practice, 2023 · Public Statement 30 of 2021 - AMC CO PTY LTD. (2021-11-08) · Virtual Assets Service Providers Act, 2022