virtual assets

Who is caught

The instruments indexed here capture virtual asset activity primarily through Jersey's anti-money laundering perimeter, the Proceeds of Crime (Jersey) Law 1999 and the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 (the Supervisory Bodies Law). A person is generally brought within scope by carrying on a Schedule 2 activity as a business, in or from Jersey, for or on behalf of a customer. Separate JFSC guidance addresses issuers who raise capital through coin, token and tokenised-asset offerings.

Virtual Asset Service Providers

• VASP activities: JFSC guidance on Article 36 confirms that providing a platform for virtual asset dealing, or services over instruments enabling control of virtual assets (for example custody of cryptographic keys), brings a person within the VASP definition even where they do not deal on their own account.
• Conducted as a business: Whether an activity is carried on as a business is assessed against non-exhaustive indicators including holding out to the public, profit motive, level of compensation, and multiple activities or customers.
• FATF alignment: Consultation feedback confirms the direction of travel to recast Schedule 2 around FATF definitions of Financial Institutions, DNFBPs and VASPs, and to replace the term virtual currency with virtual asset in an amending law (not yet in force).

Token and asset issuers

• IC/TO issuers: Guidance applies to any person or entity proposing to issue coins or tokens, whether security or non-security, through a Jersey vehicle, and requires them to assess whether they also meet the VASP definition.
• Tokenised real world assets: Guidance applies to issuers of tokenised real world assets such as equities, bonds, fund units, commodities and stablecoins, on a substance-over-form basis; tokenisation of an existing virtual asset falls within scope, while the issuance of new virtual assets is dealt with under the IC/TO guidance.
• Travel Rule: The Travel Rule guidance applies to VASPs and, via the amended Wire Transfer Regulations, brought VASPs into scope from 1 September 2023.

Registration and notification

• Schedule 2 registration: Persons carrying on Schedule 2 activities (including VASP activities) as a business must register with the JFSC as a Schedule 2 business under the Supervisory Bodies Law.
• Already-regulated businesses: Persons already registered or permitted under other Jersey financial services laws (banking, funds, insurance, financial services) who also carry on Schedule 2 business, including VASP activity, must notify the JFSC under Article 11(6) of the Supervisory Bodies Law.

Sources: The application process for issuers of initial coin and token offerings (IC/TOs) · Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 · Tokenisation of real world assets (RWAs) Guidance Note · Travel Rule guidance note · Feedback on consultation on AML/CFT scope exemptions (2022-02) · Notification of Regulated Business - Additional Schedule 2 Business

Key duties

Continuing obligations differ depending on whether a person is a registered VASP or an issuer operating under a Control of Borrowing (Jersey) Order 1958 (COBO) consent. AML/CFT/CPF obligations run across both, and fee and filing deadlines attach to Schedule 2 registered persons.

Registration and consent

• Schedule 2 registration: Register with the JFSC as a Schedule 2 business where VASP or other Schedule 2 activities are carried on as a business, and specify all activities carried on both at registration and on an ongoing basis.
• COBO consent: IC/TO issuers and tokenised real world asset issuers must obtain JFSC consent under COBO before undertaking any offering activity, supported by a legal analysis of structure, use of proceeds, service providers and wind-down.
• Corporate substance: Issuers must be incorporated as a Jersey company or Jersey LLC, administered by a JFSC-licensed trust company business, with a Jersey-resident director who is a principal person of that TCB; changes to the TCB, director or specified counterparties require prior JFSC approval.
• VASP assessment: Issuers must assess whether they meet the VASP definition and register accordingly.

AML/CFT/CPF and Travel Rule

• Customer due diligence: Apply full AML/CFT/CPF measures, including enhanced due diligence, source of funds and wealth verification, transaction monitoring, screening, suspicious activity reporting and record keeping, to token purchasers, sellers and redeemers.
• Travel Rule solution: VASPs must maintain a functioning Travel Rule solution with documented procedures, and ensure required originator and beneficiary information accompanies transfers before or at the moment the transaction completes.
• Cross-border transfers: When dealing with jurisdictions without the Travel Rule, VASPs must take reasonable steps on outgoing transfers and apply a risk-based assessment before releasing funds on incoming transfers, retaining transaction information regardless and remaining responsible for SAR filing.
• Unhosted wallets: Apply a risk-based approach to unhosted wallet transfers and do not release virtual assets where ownership and control of the wallet cannot be sufficiently verified.
• Intermediary VASPs: Verify that required information has been received before completing a transfer, document decisions to delay or refuse incomplete transfers, and forward late-received information as soon as practicable.

Disclosure, audit and reporting

• Disclosure document: Issuers must prepare and submit an information memorandum or white paper meeting prospectus-equivalent content requirements and ensure all marketing is clear, fair and not misleading.
• Retail protection: IC/TO issuers must require purchasers to actively confirm they have read and understood a prescribed risk warning before purchase.
• Audited accounts: Issuers must have annual accounts audited and filed with the Jersey Companies Registry under the Companies (Jersey) Law 1991 or the LLC Regulations 2022.
• Smart contract and asset checks: Tokenised real world asset issuers must audit deployed smart contracts and publish results, independently verify underlying assets via a qualified third party, hold assets with a professional custodian on a ring-fenced basis, and publicly disclose performance and token-holder rights.
• Default notification: The governing body of a tokenised asset issuer must promptly notify the JFSC of any default on issued tokens or inability to redeem within a reasonable period.

Fees and filing deadlines

• Annual fee: Schedule 2 registered persons, including VASPs, must pay an annual fee; the JFSC applied a 6% increase to Schedule 2 fees effective 1 January 2024, and annual fees are due within the period specified in the applicable fee notice.
• Late payment: A 5% monthly late payment surcharge applies to unpaid annual fees, and a £100 monthly late filing fee applies to documents not filed by their due date unless the JFSC agrees otherwise in advance.
• Data submission: Firms whose fees are calculated from submitted data must provide it by the stated deadline or incur a £100 monthly administration fee.

Sources: The application process for issuers of initial coin and token offerings (IC/TOs) · Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 · Tokenisation of real world assets (RWAs) Guidance Note · Travel Rule guidance note · JFSC Feedback on Consultation No.12 2023 · Feedback on Consultation No.1 2023: Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 - Fees for registered persons · Guidance to Schedule 2 Supervisory Bodies Law Registration Form - myJFSC (Revised January 2024) · Notification of Regulated Business - Additional Schedule 2 Business

Exemptions and carve-outs

The instruments provide a limited set of carve-outs, mostly in the AML/CFT and Travel Rule context rather than a general exemption for virtual asset activity.

• Non-business activity: Financial Institution activities must be conducted for or on behalf of a customer to be in scope; intra-group, employee and sole-owner arrangements are generally excluded unless third parties or other activities bring them into scope.
• Non-Professional Trustees: Non-Professional Trustees of express trusts are not required to register with the JFSC, but remain subject to AML/CFT/CPF obligations as modified by the Non-Professional Trustees Order 2016.
• Travel Rule thresholds: For transfers below EUR 1,000, verification of payer information is not required absent suspicion of money laundering or terrorist financing, though linked or aggregated transactions must be monitored.
• Out-of-scope transfers: Transfers within the same VASP, and transfers between VASPs acting on their own behalf, are out of scope of the Travel Rule; intragroup transfers and transfers where originator and beneficiary are the same person are in scope.
• Fee scope: The Schedule 2 fee changes apply to registered persons including VASPs but exclude firms of accountants and firms of lawyers from certain fee bases; no annual fee was charged to natural person Schedule 2 directors for 2024.
• Future exemptions: Under the proposed recast Schedule 2, future AML/CFT scope exemptions would only be granted by Ministerial Order where a demonstrably low risk of money laundering or terrorist financing is established under FATF Recommendation 1 criteria; this regime is not yet in force.

Sources: Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 · Travel Rule guidance note · JFSC Feedback on Consultation No.12 2023 · Feedback on Consultation No.1 2023: Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 - Fees for registered persons · Feedback on consultation on AML/CFT scope exemptions (2022-02)

Enforcement and penalties

The indexed instruments describe the offence of unauthorised business and the JFSC's public-warning practice, together with fee-related surcharges, but do not otherwise set out a detailed schedule of financial penalties for virtual asset breaches.

• Unauthorised business offence: Conducting Schedule 2 business without registering where required is an offence under the Supervisory Bodies Law, carrying up to 7 years' imprisonment and a fine.
• Public warnings: The JFSC issues public statements naming unauthorised entities holding out as providing virtual currency or virtual asset services; these notices identify breaches of Article 7 of the Financial Services (Jersey) Law 1998 and Article 10 of the Supervisory Bodies Law and direct the public to the JFSC Enforcement team.
• Fee surcharges: A 5% monthly late payment fee applies to unpaid annual fees, and £100 monthly administration and late filing fees apply for failure to supply fee-calculation data or file required documents on time.

Beyond the unauthorised-business offence and these fee surcharges, the instruments indexed here do not set out specific monetary penalty amounts for virtual asset compliance failures.

Sources: Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 · JFSC Feedback on Consultation No.12 2023 · Feedback on Consultation No.1 2023: Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 - Fees for registered persons · Handler Group Plc (the scam entity) (2025-11-13) · FXCRYPTOTRADERX (the scam entity) (2021-12-23) · Bitsbase Invest Ltd (2021-12-10) · Scam financial services website: Crypto Window Ltd (the Scam Entity) (2020-05-28)