08/10/25
The British Virgin Islands (BVI) has taken a decisive step in regulating the virtual assets sector. Since the Virtual Asset Service Providers Act, 2022 (VASP Act) came into force on 1 February 2023, the BVI has required registration and supervision of virtual asset service providers (VASPs). This article examines the key principles, practical applications, and the evolution of the framework in 2025.
📜 Regulatory Framework and Standards
The VASP Act is the core statute regulating crypto activities in the BVI. It requires any entity carrying on VASP business “in or from within the Virgin Islands” to register with the BVI Financial Services Commission (FSC). A “virtual asset” is defined as a digital representation of value that can be transferred, traded, or used for payment or investment, excluding digital fiat equivalents.
VASPs include providers of services such as exchange, transfer, custody, and issuance-related support. Mining activity, however, remains outside the scope of the Act.
The Act is integrated with the AML/CFT framework through the Anti-Money Laundering Regulations and the VASP AML/CFT Guidance, which impose customer due diligence, recordkeeping, monitoring, and reporting duties. Registration applications require disclosure of corporate structure, directors, shareholders, governance manuals, AML policies, technology safeguards, and an auditor.
As of 2025, the FSC maintains a public register of approved VASPs, confirming that the regime is actively in operation.
🔎 Comparative & Analytical Perspectives
The BVI regime aligns with FATF standards while maintaining its offshore advantages - tax neutrality, corporate structuring flexibility, and an established financial services infrastructure. Compared with other offshore jurisdictions, BVI’s measured approach targets services rather than every form of crypto activity, avoiding over-regulation.
However, the system is still new. Enforcement practice remains limited, and there are no binding BVI court rulings interpreting the VASP Act. Open questions include whether existing investment managers require dual registration and how courts will treat crypto-denominated debts in insolvency proceedings.
Recent reforms add further complexity: the BVI Business Companies (Amendment) Act, 2024, requires all companies to file registers of directors, members, and beneficial owners, with compliance deadlines extending into 2026. This narrows traditional assumptions about corporate anonymity.
In 2025, the FSC also established the Virtual Asset Service Providers Advisory Committee (VASPAC) to enhance supervision and dialogue with industry stakeholders. This signals that oversight is evolving towards closer engagement.
📊 Evidence, Use Cases & Applicability
A start-up wishing to operate a crypto exchange from the BVI must register as a VASP with the FSC. The application process requires a detailed business plan, an AML/KYC framework, cybersecurity protections, and identification of directors and shareholders who must pass “fit and proper” tests.
Token issuances are generally not covered unless they have features of securities, in which case the Securities and Investment Business Act 2010 (SIBA) applies, potentially triggering disclosure and offering restrictions.
For investment funds, proprietary holdings of virtual assets may not require registration, but custody or trading on behalf of clients will. Several VASPs have already secured FSC approval, confirming the system is workable in practice.
In insolvency, cryptoassets are treated as property, meaning they can form part of a liquidation estate. Whether a crypto-denominated liability can be used to initiate statutory demands or winding-up proceedings remains legally uncertain - a point closely watched by market participants.
⚖️ Conclusion
The BVI’s VASP Act has introduced a defined and supervised regime for crypto services, placing the jurisdiction firmly within the global regulated landscape. By combining registration requirements, AML/CFT obligations, and evolving supervisory structures, the BVI provides both clarity and opportunities for compliant operators.
Yet uncertainties remain: enforcement practice is still limited, court precedents are absent, and cross-application with securities law may generate challenges. The 2025 introduction of VASPAC and new corporate filing obligations further underline that regulation is tightening.
For businesses exploring crypto operations in or from the BVI, careful structuring and legal advice are essential. NUR Legal advises on licensing, compliance, and risk management across the virtual asset sector. Contact us to discuss how these rules may apply to your project.
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Emil Korpinen