The British Virgin Islands Crypto License
We often receive enquiries from projects who have heard about a British Virgin Islands (BVI) license for crypto and ask us to assist with obtaining one.
In fact if you google “BVI Crypto License” you’ll find a number of providers offering to obtain crypto and blockchain licenses in the BVI.
The truth however, is that no such thing exists!
If it doesn’t exist, what is being advertised as a British Virgin Islands Crypto License?
The British Virgin Islands does not currently have any specific laws or regulations covering cryptocurrency or blockchain activity. Whilst it may be possible to obtain a license under existing Financial Services regulations, it isn’t actually possible to be licensed specifically as a crypto or blockchain business, such as a cryptocurrency exchange.
In fact what is generally advertised as a BVI crypto license is simply the incorporation of a British Virgin Islands company to carry out an unregulated activity.
For many Web 3 projects this is generally suitable. In fact, it is largely due to the fact that there isn’t a crypto regulatory framework that the British Virgin Islands have been a popular choice for cryptocurrency businesses as this has meant the decision on whether or not a particular activity is licensed or regulated is determined by an analysis of the proposed activities against the existing BVI Banking & Financial Services laws and regulations.
This has allowed innovative blockchain and crypto projects to get to market, issue tokens, and operate their Web 3 business models without the friction and cost of a licensing process.
Whilst in each instance it is prudent to obtain legal advice from BVI lawyers (which Cavenwell can arrange from our partnered BVI law firms), the BVI route is a tried and tested path for a lot of crypto activity, including token issuances, NFT issuances, centralized and decentralized exchanges (DEXs), NFT marketplaces and much much more. You may find it interesting to see that some of the big crypto market players with BVI companies like BitFinex, Kraken and FTX don’t appear on the BVI list of regulated entities.
BVI Regulatory Sandbox
For those who are considered to be in-scope of existing Banking & Financial Services laws and regulations or for those who are proactively seeking a regulatory license as part of their strategy or roadmap, the “FinTech Sandbox” may be suitable.
Introduced in 2020 by the regulator in the BVI, the British Virgin Islands Financial Services Commission, the sandbox enables projects to operate for a limited period, under their supervision but without the need to apply for a regulatory license. This may provide the perfect environment to develop, test and implement technology whilst working with the regulator, gearing up to an application for full regulation at a later date.
How we can help
Cavenwell provides a bespoke suite of end-to-end managed services for Web 3 projects including assessing whether the British Virgin Islands are a suitable jurisdiction for your proposed activities, arranging incorporations and legal advice from BVI lawyers and opening cryptocurrency exchange, fiat banking and payments accounts.
We can also assist with establishing multi-jurisdictional corporate structures, in other key crypto jurisdictions like the Cayman Islands and Panama.
The content of this insight is of an educational nature and is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.