The British Virgin Islands recently brought into force the Virtual Assets Service Providers Act 2022 (VASP Act), which establishes a new legal framework for the registration and supervision of individuals and businesses providing virtual asset services (VASP). The VASP Act was enacted on 1 February 2023. Importantly, the transitional framework closes on 31 July 2023. Note, you may need to take action now if you are active in this area, see further below.

Important notes:

• The VASP Act offers a transitional framework, allowing VASPs that were operational before the regime's implementation, ie prior to 1 February 2023, to continue operating, provided they apply to the BVI Financial Services Commission (BVI FSC) for a VASP registration or else cease regulated activities.
• The deadline for submitting a VASP application to the BVI FSC closes on 31 July 2023, ie in approximately three months’ time.
• If you are involved in VASP business and have not yet applied for registration, we strongly advise you to start your application straight away. Applications take time to prepare and require the collation of a large amount of supporting documents before they can be considered complete.
• Critically, the BVI FSC has reminded the industry that it has the discretion to reject incomplete applications submitted at or near the end of the transition. We recommend that stakeholders assume that the BVI FSC will reject incomplete applications.

Following submission of a fully completed application, the transitional period will be extended by the BVI FSC to cover the period during which they make their assessment.

The VASP Act is applicable to both individuals and companies operating from the BVI and offering services, as well as BVI-incorporated companies involved in VASP business anywhere globally. Harneys prepared a detailed legal guide on VASPs which can be accessed here.

The VASP Act can be found here.

BVI FSC guidance to VASPs on the prevention of money laundering, terrorist financing, and proliferation financing is here.

Harneys has launched the BVI VASP Initial Assessment tool to offer a preliminary indication as to whether your BVI entity and its operations may be conducting VASP activity. You can access the tool here. Its use is free of charge.