British Virgin Islands

Important Aspects	Details about BVI
Specific rules for asset issuance on digital ledger	The issuance of digital assets is regulated primarily under the Securities and Investment Business Act (SIBA). Issuers must determine whether their digital asset qualifies as an "investment." If classified as such, the issuance process requires compliance with securities regulations, including registration with the FSC. The issuance must align with anti-money laundering (AML) and combating the financing of terrorism (CFT) standards. The VASP Act specifically applies to those offering virtual asset services, which may encompass certain asset issuers, depending on their activities.
Clarity over resale of digital assets	The BVI provides guidance through the SIBA on the resale of digital assets. Resale activities involving tokens that represent investment-like characteristics, such as equity or debt, fall under securities regulations. Issuers must comply with regulations concerning the offering, promotion, and resale, ensuring transparency and adherence to investor protection requirements. Resale of utility tokens, on the other hand, may fall outside of these requirements if they solely provide access to goods or services.
Clarity over trading of digital assets	Trading of digital assets, especially those classified as investments, is regulated under the SIBA and requires compliance with financial regulations. Issuers facilitating trading or offering secondary market access for their digital assets must follow the FSC guidelines. In addition, trading platforms acting as intermediaries must register as Virtual Asset Service Providers (VASPs) under the VASP Act.
Clarity about custody of digital assets	Custody of digital assets falls under the VASP Act, which mandates that entities offering custody services register as VASPs and comply with AML/CFT requirements. Asset issuers involved in custody (e.g., holding assets backing tokens) must have safeguards in place to protect clients' assets and align with FSC regulations. The specific conditions include ensuring asset security and adherence to data protection standards.
Dispute resolution of digital assets	Dispute resolution typically involves legal proceedings in the BVI. Asset issuers must comply with contractual obligations and consumer protection laws. For disputes involving digital assets, issuers must also adhere to regulations under the VASP Act or SIBA (depending on the asset type), ensuring all parties are treated fairly. The FSC may intervene if the dispute involves regulatory non-compliance, with decisions potentially subject to judicial review.
Restrictions on promoting digital assets	The VASP Act prohibits misleading advertisements for digital assets. Asset issuers must provide truthful, clear, and accurate information in promotional materials. The FSC holds authority to review and demand modifications or withdrawal of promotional content if found non-compliant. This includes restrictions on making unsubstantiated promises or forecasts about potential returns.
Process for filing of issuance of digital assets	For asset-backed or investment-like tokens, issuers must file for registration under the SIBA. This involves submitting detailed information to the FSC, including business models, risk management practices, compliance mechanisms, and AML/CFT policies. Utility token issuers, if not offering investment-like products, may be exempt from these requirements but still need to comply with data protection and consumer regulations.
Important takeaways for VASP - dealer, ATS, transfer agent	1. Registration under the VASP Act is mandatory for all virtual asset service providers. 2. Continuous compliance with AML/CFT regulations is essential. 3. The FSC has oversight authority, reviewing business models for adherence to guidelines. 4. Misleading promotional practices are strictly penalized. 5. A robust internal control system is necessary to safeguard assets and ensure transparency.
Important takeaways for digital asset issuer	1. SIBA compliance is required if the digital asset resembles an investment. 2. Issuers must ensure AML/CFT measures align with FSC standards. 3. They should provide accurate, transparent information to investors, including asset-related details. 4. Regular monitoring and reporting of suspicious transactions are necessary. 5. Marketing materials must comply with strict standards to avoid misleading investors.