This amendment to the Virtual Asset (Service Providers) Act (2024 Revision) introduces updated definitions, clarifies regulatory requirements, and strengthens the supervision of virtual asset activities.

The Bill includes the following key updates and changes:

1. Definitions and terminology:

• Introduces new definitions such as "convertible virtual asset," "financial services business" and "originator".
• Replaces references to "an existing licensee" with "a supervised person" to reflect a broader scope of oversight.

2. Supervisory and licensing enhancements:

• Strengthens the application process for licences and registration, including adjustments to fee structures and payment schedules.
• Allows the FSC to impose conditions on licence applicants based on business nature, risk, and scale.
• Allows the revocation of licences or registrations for non-compliance with regulatory obligations or for endangering client interests.

3. Operational and disclosure standards:

• Requires audited financial statements in cases where a business's size, complexity or accounts indicate potential issues.
• Mandates virtual asset service providers to ensure the accuracy of communications, disclosures, and advertising materials.

4. Custodial and safeguarding measures:

• Sets stringent requirements for safeguarding client assets, including maintaining accurate records and segregating client assets from proprietary assets.

5. Regulatory oversight and enforcement:

• Grants the FSC the power to conduct inspections and require compliance with other applicable regulatory laws for entities providing virtual asset services.
• Introduces a framework for responding to fraudulent or misleading business practices.

6. Transition and miscellaneous provisions:

• Establishes transitional arrangements for pending applications and clarifies procedural updates for appeals and audits.

The comprehensive updates aim to enhance consumer protection, align local regulations with international standards and ensure robust oversight of the virtual asset ecosystem.

For further details, the full text of the Bill is available here.