The British Virgin Islands (BVI) are renowned as one of the biggest offshore jurisdictions in the world. The nation has made significant measures to become a desirable location for international entrepreneurs, particularly those who want to create, host, and expand crypto-related firms.
Consider the basic terms of the BVI corporate registry of the crypto firm and the primary pros and cons of the crypto company.
The present cryptocurrency scenario in BVI
- Government stance on cryptography
The government has not developed a regulatory framework for virtual assets, blockchain technology, or financial technology in general, nor does it now provide regulatory counsel or guidance for cryptocurrencies.
Although the jurisdiction has indicated its intent to build a cryptocurrency-friendly legal environment, no legislative drafts or consultations have been revealed.
- BVI regulations for crypto
The Financial Services Commission (FSC) of the British Virgin Islands stated on 10 July 2020 that crypto-related activities would be governed under the current financial services law.
To guarantee compliance, organizations with activities connected to running a cryptocurrency exchange or participating in crypto financing must carefully assess if their intended operations come within the scope of the following laws, among others:
1,Securities and Investment Business Act of 2010 (SIBA) Act to provide for the licensing, regulation, and supervision of investment businesses, and for other purposes related thereto.
The BVI Financial Services Commission has determined that the SIBA may apply where a virtual asset product or service offers a benefit or right beyond that of a medium of exchange.
2.The Money Laundering Regulations, 2008 (MLR), as revised periodically.
By implementing customer due diligence methods, these rules attempt to prevent and identify money laundering and terrorist funding in the British Virgin Islands.
Companies should consider complying to the anti-money laundering framework as a matter of good corporate governance regardless of whether they are subject to this legislation.
3.The modified Banks and Trust Companies Act of 1990 (BTCA)
Given that the Act specifies prudential norms for banks and trust organizations, it would also apply to cryptocurrency firms whose activities fall within the scope of banking activity.
4.Financial Services Agency Act of 2001 (FSCA)
Under this statute, the FSC has wide supervisory authority over all financial services in or from the British Virgin Islands.
5.The modified Financing and Money Services Act of 2009 (FMSA)
When a cryptocurrency transaction is used to enable currency exchange services, it may be considered the providing of money services and hence come within the purview of the Financial Modernization and Security Act (FMSA).
Should cryptocurrency activities be part of BVI?
The expanding quantity of cryptocurrencies, transactions, and investments, as well as their widespread usage, have enticed several businesses to join this market.
Recent analysis indicates that the global blockchain industry will exceed $60 billion by 2025, with a compound annual growth rate of 69.4%.
As with any company, there will come a point when it makes sense to incorporate your bitcoin activity.
A BVI Business Company is one of the most prevalent legal structures for launching crypto-based enterprises (BC).
A Business Company is a legal organization created under the BVI Business Companies Act of 2004 (BCA) that offers flexibility, relatively free flow of cash, and inexpensive formation expenses. You may utilize a BC to conduct the crypto-based enterprise so long as the cryptocurrency is not associated with unlawful activities.
A BC will be required to seek licenses to engage in crypto-related activities in compliance with FSC requirements, notwithstanding the absence of fully enacted crypto licensing laws for BVI corporations.
Do not have licenses to start a crypto company? If you register a company in the British Virgin Islands for a third-party fund, like an asset or capital management, you won’t need a crypto license to start your business. Find out more by contacting a fintech law specialist.
