The Commission is the regulatory authority responsible for financial services business (including the VASP Act) in the BVI.

The Commission’s principal functions include supervising, monitoring and regulating financial services businesses carried on in or from within the BVI, monitoring the effectiveness of financial services legislation and making recommendations to the BVI Cabinet on amendments to financial services legislation.

The BVI Financial Investigation Agency (FIA) is the BVI’s financial intelligence unit (FIU) and one of the key competent authorities responsible for preventing, detecting, and analysing financial crime. It plays a central role in the BVI’s AML/CFT/CPF framework and fulfils the requirements of FATF Recommendation 29, which mandates that every jurisdiction maintain an independent FIU. The FIA is also the reporting authority of the BVI and, as a result, receives all suspicious activity reports (SARs)/suspicious transaction reports (STRs) pertaining to ML/TF/PF.

The BVI aligns its AML/CFT framework with FATF Recommendations. Since June 2025, the BVI has made a high-level political commitment to work with the FATF and Caribbean Financial Action Task Force (CFATF) to strengthen the effectiveness of its AML/CFT regime and has since taken steps to improve its AML/CFT regime by strengthening fit and proper checks, ensuring basic information on legal persons is available to the general public, and raising awareness of how legal persons can be misused for money laundering and terrorist financing. In the CFATF’s report published in October 2025, the CFATF indicated that the BVI has made significant progress in addressing the technical compliance deficiencies identified in its Mutual Evaluation, with 40 Recommendations now rated “compliant” or “largely compliant”.

The primary legal question is which regulatory regime an instrument or product falls under: an “investment” governed by the BVI’s Securities and Investment Business Act (2020 revised edition) (as amended) (SIBA); or a “virtual asset” captured by the VASP Act, a combination of both, or neither. That determination drives the applicable rules and regulatory treatment; both regimes can apply if an instrument or product exhibits features of each, while certain items may be excluded altogether.

SIBA sets out an exhaustive list of financial instruments that constitute “investments”. Cryptographic tokens are not expressly included in that list. However, whether the characteristics of a token or other digital asset could nevertheless render it an “investment” under SIBA is a fact-specific enquiry dependent on the unique functionalities exhibited by the token or asset. If a token qualifies as an “investment” under SIBA, reference should be made to certain regulated activities (requiring a SIBA licence), including (among others) dealing in, or arranging deals in, ”investments”, custody, administration of “investments” and operating an “investment exchange”. Service providers engaging in such activities may be required to be licensed under SIBA.

Under the VASP Act, activities conducted as a business on behalf of another person involving “virtual assets”, including (but not limited to) exchange services, transfers, safekeeping or administration of virtual assets, operating a virtual assets exchange and custody of virtual assets, would be considered regulated activities. Where a person carries on any of these activities in or from within the BVI, that person must be registered as a VASP.

In the BVI FSC’s Guidance on the Regulation of Virtual Assets in the Virgin Islands (July 2020), the BVI FSC clarified that “virtual assets and virtual assets-related products used as a means of payment for goods and services which provide the purchaser with an ability to only purchase goods and services would not be captured by financial services legislation”. However, “where a virtual asset product or service provides a benefit or right beyond a medium of exchange, it may be captured under SIBA”. Although not exhaustive, the guidelines do provide clear examples of products which will be in scope as SIBA “investments”, such as “a futures contract involving a virtual asset or virtual assets”. 

NFTs are not expressly addressed under either SIBA or the VASP Act. Whether a particular NFT constitutes a “virtual asset” or a SIBA “investment” is determined on a case-by-case basis by reference to its specific features and the rights it confers. NFTs that are truly unique, non-fungible and non-transferable for value are less likely to fall within either regime, but fractionalised NFTs or those conferring economic rights will require careful analysis.

Unlike the EU’s Markets in Crypto-Assets Regulation (MiCA), the BVI does not operate a tiered categorisation system for crypto-assets (such as e-money tokens, asset-referenced tokens or utility tokens). The BVI’s approach remains fact-specific, which offers flexibility but places the burden of classification on issuers, service providers handling those tokens and their respective advisers to ensure compliance with the relevant BVI regulatory frameworks.

In principle, the use of a fund wrapper does not alter the underlying regulatory analysis, which remains focused on the nature of the asset or activity. However, it introduces an additional layer of regulation under the BVI’s funds regime. 

BVI funds investing in virtual assets will typically be structured as incubator, approved, private, professional or public funds under SIBA and related legislation, depending on the size of the fund and their investor base.

A key consideration will be whether or not the services listed in 2.2 Crypto-Asset Regulatory Frameworks are now being conducted by the fund on its own behalf.  If so, it is likely that the fund will fall within the BVI funds regime and not VASP or the investment business limbs under SIBA. The regulatory position will depend on the activities carried on. A fund which is invested in virtual assets as a passive investor will not ordinarily be required to register as a VASP. However, where a fund or its operator conducts VASP activities “as a business” for or on behalf of third parties – for example, operating a trading platform, providing custody services or facilitating exchange between virtual assets – a separate registration under the VASP Act and/or licensing under SIBA may be required.

Fund managers, investment advisers and administrators must also consider whether their own activities trigger licensing requirements under SIBA or registration under the VASP Act.

Token issuances and initial coin offerings continue to be popular in the BVI, reinforced by the Commission’s guidance that the minting and sale of a virtual asset by way of a new token issuance is excluded from the requirement to register under the VASP Act.

There are no specific disclosure rules for selling and/or virtual assets cross-border into the BVI from outside of the BVI; however, the virtual asset activity should be assessed as to whether such activity is being carried out “in or from within” the BVI and therefore may be subject to licensing.

Where the virtual asset being issued also constitutes an “investment” for SIBA purposes, SIBA requirements may apply, as such, careful analysis of the terms and features of any virtual asset product is critical prior to an offering or issuance.

The BVI has no standalone market abuse regime. Insider trading and market abuse provisions exist within SIBA but apply only to “investments” as defined in SIBA – meaning they catch virtual assets only where those assets qualify as SIBA investments (see2.2 Crypto-Asset Regulatory Frameworks).

Where a virtual asset does not meet that threshold, no specific statutory market abuse prohibition applies under BVI law. The VASP Act does not introduce market manipulation or insider trading offences, though general fair dealing obligations and AML/CFT requirements apply.

The Commission has broad enforcement powers and tools, including the ability to issue directions, impose conditions, suspend or revoke licences or registrations, and seek injunctive relief. Operating without the required registration or licence may give rise to both civil and criminal penalties, including fines and, in certain cases, imprisonment.

The Commission has indicated that it actively monitors for unregistered activity and adopts a proportionate but firm approach to enforcement. In a cross-border context, the Commission co-operates with foreign regulators through its network of memoranda of understanding, while the FIA plays a key role in relation to AML/CFT enforcement.

Enforcement activity is expected to intensify in light of ongoing regulatory developments globally.

Under the VASP Act, no person may carry on, in or from within the BVI, a virtual asset service without being registered by the Commission. The VASP Act regulates:

• exchange between virtual assets and fiat currencies;
• exchange between virtual assets;
• virtual asset transfers; hosting wallets or custody services;
• participation in and provision of financial services related to an issuance; and
• the operation of a virtual asset trading platform, in addition to providing virtual asset kiosks (such as automatic teller machines, bitcoin teller machines or vending machines).

The terminology “in or from within” is not a defined concept under the VASP Act. Given this, it is not possible to advise with certainty as to its parameters. However, based on professional experience and practice rather than express statutory guidance, provided that a virtual asset service business (i) has no physical presence in the BVI, or staff, agents, employees, representatives or any form of branch or operation in the BVI; (ii) is not a BVI registered company; and (iii) will not be actively marketing towards or seeking to solicit BVI entities or BVI residents, it should fall outside the scope of the VASP Act.

Importantly, the VASP Act provides an exhaustive list of persons who shall not qualify or be treated as a VASP under the VASP Act, being the following:

• providing ancillary infrastructure to allow another person to offer a service, such as cloud data storage provider or integrity service provider responsible for verifying the accuracy of signatures;
• providing service as a software developer or provider of unhosted wallets whose function is only to develop or sell software or hardware;
• solely creating or selling a software application or virtual asset platform;
• providing ancillary services or products to a virtual asset network, including the provision of services like hardware wallet manufacturer or provider of unhosted wallets, to the extent that such services do not extend to engaging in or actively facilitating as a business any of those services for or on behalf of another person;
• solely engaging in the operation of a virtual asset network without engaging or facilitating any of the activities or operations of a VASP on behalf of customers;
• providing closed-loop items that are non-transferable, non-exchangeable, and which cannot be used for payment or investment purposes; and
• accepting virtual assets as payment for goods and services (such as the acceptance of virtual assets by a merchant when effecting the purchase of goods).

There is no express BVI law obligation on a BVI company to have a physical presence in the BVI and it is increasingly common for BVI companies to engage consultants based around the world. One particular exception to this rule is that all BVI entities are required to satisfy the BVI Economic Substance test pursuant to The Economic Substance (Companies and Limited Partnerships) Act, 2018, and the Economic Substance (Companies and Limited Partnerships) (Amendment) Act 2021 (Substance Legislation). All BVI entities are advised to seek advice in relation to economic substance, particularly any companies that might be deemed to be engaging in “intellectual property business”, “fund management business”, “finance and leasing business”, “distribution and service centre business” or “headquarters business”. Additionally, the BVI FSC can, under the VASP Act, having regard to the nature and risk associated with a VASP, require the VASP to have an individual director physically resident in the BVI if it does not already have one.

In order to engage in any business, profession or trade in the BVI, as distinct from establishing an offshore trust, limited partnership or company, all persons and companies must obtain a business licence under the Business Licensing Act. However, a person who is a licensee under SIBA or the VASP Act is exempt from the need to obtain a business licence to carry on any class of investment business in respect of which they are licensed or to carry on the business of providing a virtual assets service in and from within the BVI. To the extent that a business licence is required, applicants are encouraged to start the process early and engage a local service provider to assist with the licensing process.

A work permit must be obtained for any expatriate who wishes to engage in employment in the BVI, whether it is paid or unpaid, full-time or part-time. Employers must advertise any position in a local newspaper in the BVI for two consecutive weeks and give preference to any belonger or Virgin Islander who has applied and is qualified for the position. Subject to obtaining a work permit for individuals, there are no quotas or caps.

A person owning or holding a significant interest or a controlling interest in a VASP is not permitted to, whether directly or indirectly, sell, transfer, charge or otherwise dispose of their interest in the VASP, or any part of their interest, unless the prior written approval of the FSC has been obtained.

A person is not permitted, whether directly or indirectly, to acquire a significant interest or controlling interest in a VASP unless the prior written approval of the FSC has been obtained.

A VASP is not permitted, unless the prior written approval of the FSC has been obtained, to cause, permit or acquiesce in a sale, transfer, charge or other disposition or issue or allot any shares or cause, permit or acquiesce in any other reorganisation of its shares that results in a person acquiring a significant interest or controlling interest in the VASP, or a person who already owns or holds a significant interest or controlling interest in the VASP increasing or decreasing the size of their interest.

An application to the FSC for approval is to be made by the VASP, and any fees payable for the application and any approval of the application in that regard shall be paid by the VASP. The FSC shall not grant approval unless it is satisfied that, following the acquisition or disposition, any person who will acquire a significant interest or controlling interest in the VASP satisfies the fitness and propriety criteria outlined in the Regulatory Code (Regulatory Code).

The preceding paragraphs do not apply to a VASP that is listed on a recognised exchange.

A “significant interest”, in relation to an entity, means a holding or interest in the entity or any holding company of the entity held or owned by a person, either alone or with any other person and whether legally or equitably, that entitles or enables the person, directly or indirectly to:

• control 10% or more of the voting rights of that entity at a meeting of the entity or of its members;

• a share of 10% or more in any distribution (if applicable) made by the entity;

• a share of 10% or more in any distribution (if applicable) of the surplus assets of the entity; or
• appoint or remove one or more directors of the entity.

A “controlling interest” means interest in an entity whereby:

• the person holding the interest has an influence over the activities of any undertaking of the entity without having a significant interest in the undertaking; or
• a director or senior officer of the entity is accustomed to acting on the instructions of the person.

The BVI is not part of any international passporting regime, so a licence issued by the Commission does not, on its own, create a right to operate in another country. Cross‑border activity instead depends on co-operation arrangements and information‑sharing mechanisms that the Commission maintains with foreign regulators, rather than any automatic recognition of BVI authorisations.

The BVI maintains memoranda of understanding with International Organization of Securities Commissions (IOSCO) members and various foreign regulators to facilitate information exchange and supervisory co-operation. These arrangements enhance cross‑border oversight but do not grant market‑access privileges. The Commission’s involvement with global bodies like FATF and IOSCO informs its regulatory approach, yet firms must still secure local approvals to conduct regulated activities abroad.

There are no specific marketing rules for selling virtual asset services cross-border into the BVI from outside of the BVI; however, the virtual asset activity should be assessed as to whether such activity is being carried out “in or from within” the BVI and therefore may be subject to licensing.

The BVI has no dedicated financial promotions regime; however, licensees (including VASPs under the VASP Act) are generally subject to general prohibitions and restrictions on marketing material, including making false, misleading or deceptive statements in marketing materials. Additionally, a VASP that is registered to operate a virtual assets exchange shall not engage in trading or marketing activities in relation to any virtual assets for its own benefit which may be detrimental to the interests of its clients, unless such activities: (i) are necessary for the operation of the virtual assets exchange; and (ii) have been disclosed to its clients prior to engaging in the trading or marketing activities. Notwithstanding, all marketing should be complete, correct and not misleading in any way.

White-label solutions are commonly used in the BVI. A key consideration is whether the entity undertaking the relevant activities and providing the underlying service is itself carrying on VASP activities in or from within the BVI. If so, it may require its own registration. It is also important that the non-licensed entity utilising the white-label solutions does not hold itself out as carrying on the VASP activity itself as this might also trigger a VASP registration requirement (where the activities are conducted in or from within the BVI). Care should be taken that, among other things, no words are used, in any language, which connote a virtual asset business in the description or title of the business in question, and that no representation is made in any document or in any other manner that a person is carrying on virtual asset business.

Since the VASP Act came into force, the BVI has not enacted separate or additional legislation on DeFi. Each DeFi project must therefore be evaluated based on the asset classes and activities conducted to determine whether it falls within existing licensing requirements.

Merely providing ancillary infrastructure to allow another entity to offer their service does not qualify as VASP activity under the VASP Act.

The BVI Business Company is the predominant corporate vehicle employed for blockchain‑related initiatives. Its flexible governance and operational framework render it particularly suitable for token issuances, digital‑asset custody, operational and development support and participation in DeFi activities.

While the BVI does not have foundation companies, it is common for decentralised organisations to utilise multi-jurisdictional structures, including a foundation company established in a jurisdiction such as the Cayman Islands, alongside a BVI-operating entity.

Typically, a standard BVI Business Company can be incorporated within one to three business days upon the Registrar having been satisfied that all of the BVI Business Companies Act (as amended) incorporation requirements have been met, with express incorporation timings available for additional registry fees. There is no requirement to publicise an intention to incorporate, nor is there any pre‐approval by any BVI regulatory body.

Although the BVI courts have not directly tested DeFi protocol failure, the BVI courts have seen interesting and notable developments in recent years with regards to distributed and decentralised infrastructure and digital asset cybercrime, for example, by ordering interim mandatory injunctive relief against non-cause of action defendants, and permitted service by alternative means on a person unknown outside of the jurisdiction by way of NFT airdrop to their digital wallet (see AQF v (1) XIO, (2) VQF and (3) CGN and ChainSwap Limited v Persons Unknown). However, the BVI courts have not yet been asked to determine the liability of DeFi protocol developers, governance token holders, or liquidity providers for user losses in non-fraud scenarios.

In the absence of specific BVI authority, liability will turn on whether a duty of care exists and whether the decentralised nature of the protocol severs the causal chain. Developers and founders with BVI connections are advised to take legal advice on structuring to manage liability exposure, particularly regarding governance rights and control over protocol parameters.

Payments in virtual assets are permitted in the BVI (subject to AML/CFT/PF compliance) and are increasingly common in commercial arrangements, fund structures, and technology‑driven businesses. The BVI does not regulate the use of crypto as a means of payment, but does regulate the natural or legal persons that conduct VASP activities as a business on behalf of another natural or legal person.

See 2.2 Crypto-Asset Regulatory Frameworks regarding confirmation from the Commission as to the use of digital assets as a means of payment for goods and services.

As discussed in2.2 Crypto-Asset Regulatory Frameworks, the primary legal question when considering tokenisation is which regulatory regime an instrument or product falls under: an “investment” governed by SIBA or a “virtual asset” captured by the VASP Act, a combination of both, or neither, given that the BVI does not differentiate between the types of virtual assets which may exist (whether, for example, a utility token, stablecoin, NFT or RWA).

Recent developments, including the recognition that crypto-assets should be treated as “assets or property” and the UK’s Property (Digital Assets etc) Act 2025, firmly establish that a token may constitute a proprietary interest in its own right, rather than operating merely as a contractual or evidentiary artefact referencing an off‑chain entitlement. This reconceptualisation expands the range of property law and insolvency frameworks that can be applied – avenues that were not available or largely uncertain prior to these developments, aligning them more closely with historic property law and legal recognition.