This week saw the publication of a key document by the BVI financial services regulator, the Financial Services Commission, giving guidance on the regulation of virtual assets. Although the BVI does not yet have a specific law which implements the FATF recommendations for virtual assets, it is nevertheless clear that the BVI's existing regulatory framework is the starting point for assessing whether a product or activity is within the scope of regulation. Of note is a reference in the guidance to the territory's anticipated regulatory sandbox, which will be of interest to those looking to establish a VASP business in the BVI. The guidance will be welcomed by industry participants and investors, as it confirms the Commission's approach to virtual assets, and virtual asset related activities.
The Financial Services Commission (the “Commission”) recognises that there has been some uncertainty throughout the world as it relates to whether the existing regulatory landscape captures virtual asset-related activities and that regulatory responses are not harmonised across jurisdictions. The Commission, through the issuance of the Regulation of Virtual Assets in the Virgin Islands Guidance, seeks to clarify the Territory’s position. The Commission’s guidance provides clarity on the applicability of existing legislation to virtual asset related activities. Persons engaged in these activities should review the guidance and ensure they adhere to the Commission’s position on the activities within its regulatory remit.