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This industry update is more than 1 year old

Industry update

Virtual Asset Service Provider

Virtual Currency Exchange Businesses have been required to register with the JFSC since 2015 and subject to anti-money laundering/countering the financing of terrorism/countering proliferation financing (AML/CFT/CPF) legislation.

 

In order to ensure that all virtual asset activities are subject to the same AML/CFT/CPF legislation requirements, the Proceeds of Crime (Amendment No. 6) (Jersey) Order 2022 (Amendment No. 6) has aligned Jersey’s Virtual Asset and Virtual Asset Service Providers regime to the Financial Action Task Force Standards (The FATF Recommendations (fatf-gafi.org)).

 

Amendment No. 6 has introduced the following definitions:

“Virtual Asset” means a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes.

“Virtual Asset Service Provider” includes a natural or legal person or arrangement that carries on the business of conducting one or more of the following activities or operations to, for or on behalf of another natural or legal person or arrangement:

  • Exchange between virtual assets and fiat currencies,
  • Exchange between one or more forms of virtual assets,
  • Transfer of virtual assets,
  • Safekeeping or administration of virtual assets or instruments enabling control over virtual assets,
  • Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

What do you need to do?

If you are an existing business (operating prior to 24 January 2023) conducting virtual asset service provider activity in Jersey, you need to register with the JFSC to continue conducting business. This will require the following:

  • If you were previously registered as a Virtual Currency Exchange Business, you will need to complete the registration form available on our website. We will treat this application as a notification.
  • If you have previously notified us to operate as a Virtual Currency Exchange business benefitting from the “turnover” exemption (as contained within the Proceeds of Crime (Supervisory Bodies) (Virtual Currency Exchange Business) (Exemption) (Jersey) Order 2016, you will need to complete the registration form available on our website. We will treat this application as a new application.
  • If you are registered under the Financial Services (Jersey) Law 1998 to conduct financial services business, you will need to complete the registration form in relation to your existing virtual asset service provider activity. We will treat this application as a notification.
  • If you are a new business (who began operating after 24 January 2023), you must register with the JFSC before you begin conducting business. We will treat this application as a new application.

If you are not sure whether you need to register, it is important you consider at an early stage whether, based on the descriptions of VASP activity within Amendment No. 6, you are carrying on in-scope VASP activity by way of business in or from within Jersey.

Failure to register is a contravention of Article 10 of the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 1999, and those persons who fail to register shall be guilty of an offence and liable to imprisonment for a term of 7 years and a fine.

 

Tips for applying for registration:

Businesses who are already conducting VASP activity have until 30 June 2023 to complete and submit their applications. Please ensure that you submit these applications within sufficient time to be considered during this period.

  • Be prepared: a copy of the registration form is available on our website which you can review prior to submitting your application. Review the forms and the information on our website so that you know what information and documentation you will require.
  • Complete applications: you must ensure that you fully answer every mandatory question on the application and provide all information requested. Any omission will result in further information requests to your business, causing delays. Continued failure to provide requested information may lead to your application being suspended or refused.
  • Provide up-to-date, specific information: the information and documents you supply should be up to date and specific, do not reuse older documents if they are not fit for purpose.

 

If you are unsure whether your business is required to register, refer to the infographic and the JFSC’s website

VASPS infographic

“Transfer”, in relation to virtual assets, means to conduct a transaction on behalf of another natural or legal person or arrangement that moves a virtual asset from one virtual asset address or account to another.