virtual assets

Who is caught

The instruments indexed here regulate virtual asset activity in Jersey principally through the anti-money-laundering perimeter and, for token issuers, through the consent regime under the Control of Borrowing (Jersey) Order 1958. The central regulated category is the Virtual Asset Service Provider (VASP), defined by reference to the FATF and Proceeds of Crime (Jersey) Law 1999 definitions, but token issuers are brought in through separate consent-based guidance.

• Virtual Asset Service Providers: JFSC guidance 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. VASP activity is a Schedule 2 activity requiring registration.
• IC/TO issuers: Issuers of initial coin and token offerings are within scope where they issue virtual assets; they must be incorporated as a Jersey company or Jersey LLC and operate under a JFSC consent granted under COBO.
• Tokenised real world asset issuers: Issuers tokenising securities, bonds, commodities, currencies, fund units and similar assets, including stablecoin issuers, are covered by separate RWA guidance and also require COBO consent; that guidance applies where an existing virtual asset is tokenised.
• Schedule 2 businesses: Persons conducting VASP or other Schedule 2 activities as a business, for or on behalf of a customer or third party, in or from Jersey fall within the registration regime under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008.
• Travel Rule coverage: Amended Wire Transfer Regulations brought VASPs into scope of the Travel Rule from 1 September 2023, applying to virtual asset transfers between VASPs.
• Terminology alignment: A planned amending law replaces the term virtual currency with virtual asset, aligned to the FATF definition, as part of recasting Schedule 2 around FATF definitions of FI, DNFBP and VASP activities.

Regulated businesses already registered or permitted under other Jersey financial services laws that additionally carry on Schedule 2 business, including VASP activity, must notify the JFSC of that activity under Article 11(6) of the 2008 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

The recurring obligations fall into three groups: registration or notification, AML/CFT/CPF controls, and, for token issuers, consent, governance and disclosure conditions. Several duties are continuing and some carry publication or notification timing.

Registration and notification

• Schedule 2 registration: Persons conducting VASP or other Schedule 2 activities as a business must register with the JFSC as a Schedule 2 business under the Supervisory Bodies Law, specifying all activities carried on both at registration and on an ongoing basis.
• Registration application detail: The myJFSC Schedule 2 registration form requires applicant and business details, identification of principal and key persons (directors, 10% shareholders, MLRO and MLCO), certified passports, disclosure of convictions, a business risk assessment where none has been completed, and confirmation of AML/CFT/CPF policies and training; applicants must indicate whether the application relates to VASP activity.
• Additional Schedule 2 notification: Regulated businesses (funds, banks, CIF permit holders, FSL registrants, insurance permit holders) that also carry on Schedule 2 business, including VASP activity, must notify the JFSC using the prescribed notification form under Article 11(6) of the 2008 Law, with original signatures.

AML/CFT/CPF and the Travel Rule

• 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 handling: When sending to jurisdictions without the Travel Rule, VASPs must take reasonable steps to establish whether the recipient can receive the information and must collect and retain it regardless; when receiving from such jurisdictions, they must apply a risk-based assessment before releasing funds and remain responsible for suspicious activity reporting.
• Linked transactions and wallets: VASPs must have controls to detect linked or aggregated transactions between the same originator and beneficiary, and must apply a risk-based approach to unhosted wallet transfers, not releasing assets where ownership and control cannot be sufficiently verified.
• Issuer AML measures: IC/TO and RWA token issuers must apply AML/CFT/CPF customer due diligence, including enhanced measures for higher-risk cases, to token purchasers and redeemers, and must refuse to issue or buy back tokens where checks are not satisfactorily completed.

Issuer consent, governance and disclosure

• COBO consent: IC/TO and RWA issuers must obtain JFSC consent under COBO before undertaking any token activity, and seek prior JFSC consent or approval for material changes and for changes of TCB, Jersey-resident director or specified counterparties.
• Corporate substance: Issuers must be incorporated as a Jersey company or LLC, be administered by a JFSC-licensed trust company business, and maintain a Jersey-resident director who is a natural person and principal person of that TCB.
• Disclosure documents: Issuers must prepare and submit an information memorandum (which may be a white paper) meeting prospectus-style content requirements and ensure all marketing material is clear, fair and not misleading.
• Audit and verification: IC/TO issuers must have annual accounts audited and filed with the Jersey Companies Registry. RWA issuers must additionally have smart contracts deployed each year audited with results published, and have underlying assets independently verified annually confirming 100 percent collateralisation and ring-fencing, published within three months of the financial year end.
• Custody and ring-fencing: RWA issuers must hold underlying assets with a professional custodian in an equivalent jurisdiction, ring-fence assets, and not lend them for yield unless expressly agreed by the JFSC; stablecoin issuers must make additional disclosures on collateral, liquidity, custody and redemption arrangements.
• Default notification: An RWA issuer's governing body must promptly notify the JFSC if it defaults on tokens issued or cannot redeem tokens within a reasonable period.
• Retail protection: IC/TO issuers must have procedures to mitigate inappropriate retail investment and require purchasers to actively confirm they understand a prescribed risk warning before purchase.

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 · 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 exemptions in these instruments arise mainly under the Travel Rule and the AML scope tests, together with planned reforms to the scope-exemption regime.

• Low-value transfers: Under the Travel Rule guidance, transfers below EUR 1,000 do not require verification of payer information absent suspicion of money laundering or terrorist financing, and such transfers are treated as out of scope.
• Same-entity transfers: Transfers within the same VASP, and transfers between VASPs acting on their own behalf, are out of scope; intragroup transfers and transfers where originator and beneficiary are the same person are in scope.
• FI arrangements: For Financial Institution activities, intra-group, employee and sole-owner arrangements are generally excluded unless third parties or other activities bring them into scope; FI activity must be conducted for or on behalf of a customer to be in 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.
• Tokenised real world assets: The IC/TO application guidance applies only to issuance of virtual assets and not to tokenised real world assets, which are governed by separate RWA guidance.
• Future scope exemptions: Under the planned recast of Schedule 2, future AML/CFT scope exemptions will only be granted by Ministerial Order where a demonstrably low risk of money laundering or terrorist financing is established under FATF Recommendation 1 criteria.
• COBO-based exemptions: On the planned repeal of the Control of Borrowing framework, exemptions currently conditioned on holding a COBO relevant consent are expected to persist but must instead satisfy other existing legal conditions such as investor warnings.

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 · Repeal of the Control of Borrowing Framework Consultation Feedback Paper (2025-11) · Feedback on consultation on AML/CFT scope exemptions (2022-02)

Enforcement and penalties

The enforcement material indexed here concerns the offence of conducting unauthorised business and the JFSC's use of public warning notices, rather than a detailed schedule of administrative fines.

• Unauthorised business offence: Failure to register where required and conducting unauthorised Schedule 2 business is an offence under the Supervisory Bodies Law carrying up to 7 years' imprisonment and a fine.
• Public warning notices: The JFSC issues public statements naming unauthorised entities that falsely claim JFSC registration while offering virtual currency exchange or virtual asset services; such conduct is stated to breach Article 7 of the Financial Services (Jersey) Law 1998 and Article 10 of the Supervisory Bodies Law (and, where deposit-taking is involved, Article 8 of the Banking Business (Jersey) Law 1991).
• Enforcement referral: The public is directed to verify a firm's regulated status and to report dealings with named scam entities to the JFSC Enforcement team, with a confidential whistleblowing line available for anonymous reports.

Beyond the unauthorised-business offence noted above, the instruments indexed here do not set out a specific schedule of monetary penalty amounts for regulated VASPs or issuers.

Sources: Guidelines on interpretation of Article 36 of the Proceeds of Crime (Jersey) Law 1999 · 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)