🇻🇨 Is Saint Vincent and the Grenadines Now Regulating Crypto by Law?

🏛️ What Has Changed – Key Facts and Concerns

Under the VABA, any individual or entity offering virtual asset services in or from SVG must be formally registered with the FSA. This includes activities such as crypto-to-crypto and fiat-to-crypto exchanges, transfers, custody, and token issuance. The registration process requires submission of a detailed business plan, Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) policies, and a statutory deposit. The statutory deposit is set at EC$100,000 (approximately USD 37,000) or 25% of the financial obligations to clients, whichever is higher. An application fee of EC$4,000 (approximately USD 1,500) is also required. Upon approval, a registration fee of EC$12,000 (approximately USD 4,500) is payable annually. The FSA aims to process complete applications within 90 days.

⚖️ Regulatory Standards and Obligations

The VABA aligns SVG with international standards, including those set by the Financial Action Task Force (FATF). Applicants must demonstrate compliance with AML and CFT regulations, implement robust Know Your Customer (KYC) procedures, and maintain adequate financial resources. The FSA evaluates each applicant’s governance structures, requiring the appointment of a Money Laundering Compliance Officer and a Money Laundering Reporting Officer, both subject to FSA approval. Additionally, entities must establish a physical presence in SVG, maintain proper bookkeeping, and engage an external auditor to review financial statements in accordance with local law.

🌐 Analysis and Comparison

Before the enactment of the VABA, SVG operated as a permissive jurisdiction for virtual asset activities, with minimal regulatory oversight. The introduction of the VABA marks a significant shift towards formal regulation, aligning SVG with other jurisdictions in the Eastern Caribbean that have adopted similar frameworks. Compared to other jurisdictions, SVG’s regulatory requirements are competitive, offering a balance between compliance obligations and operational flexibility. The emphasis on statutory deposits tied to client obligations strengthens financial safeguards, enhancing the credibility of licensed entities.

📑 Practical Application and Industry Response

Since the implementation of the VABA, the FSA has commenced the registration process for VASPs. Entities engaged in virtual asset services are required to submit a comprehensive application package, including a detailed business plan, due diligence documentation, and the payment of the application fee and statutory deposit. The FSA conducts a thorough review of each application to ensure compliance with regulatory standards. Upon successful registration, entities are granted authorisation to operate as licensed VASPs within SVG. Existing operators who have not yet completed the registration process are encouraged to do so promptly to avoid potential sanctions or deregistration.

✅ Conclusion

The introduction of the Virtual Asset Business Act signifies SVG’s commitment to establishing a structured and compliant environment for virtual asset activities. The regulatory framework provides clarity and assurance to businesses and investors, promoting transparency and accountability within the sector. Entities operating in or intending to establish operations in SVG must adhere to the registration requirements and ongoing compliance obligations set forth by the FSA. Failure to comply may result in deregistration and cessation of operations.

If your company operates in or intends to establish in SVG, expert legal guidance is indispensable. Contact NUR Legal for assistance with regulatory due diligence, application preparation, and ongoing compliance in this evolving sector.

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