1. 1. Every company must now file a copy of the register of members with the BVI Registrar of Corporate Affairs (the “Registrar”).
   2. The initial register of members created after incorporation of the company must be filed with the Registrar within thirty (30) days after the date of incorporation or within thirty (30) days after the date of continuation into the BVI (as applicable). Subsequent changes to a company’s register of members must be filed within thirty (30) days of the changes occurring. The register of members will not be publicly available unless the company elects at the time of filing with the Registrar to have the filing publicly accessible.

Where a company has a member that acts as a nominee shareholder, the company is required to, in addition to filing the register of members, file with the Registrar the following information in relation to the nominee shareholder:

1. 1. 1. the name and address of the nominator;
      2. the date on which the nominee shareholder ceased to be a member; and
      3. the date on which a person ceased to be a nominator.

The requirement to file the register of members of a BVI company with the Registrar does not apply to a company:

1. 1. 1. whose shares are listed on a recognized exchange;
      2. that has been recognized by the Financial Services Commission of the BVI (BVI FSC) as a private fund, professional fund, public fund or a private investment fund recognized under the Securities and Investment Business Act; or
      3. that has been recognized by the BVI FSC as an incubator fund or approved fund.

A BVI company that was struck off and dissolved and subsequently restored to the Register of Companies maintained by the Registrar is not required to file a copy of its register of members.

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This publication is not intended to be a substitute for specific legal advice or a legal opinion. For specific advice on the matters covered above, please contact your usual Loeb Smith attorney or any of the following:

E: gary.smith@loebsmith.com
E: robert.farrell@loebsmith.com
E. elizabeth.kenny@loebsmith.com
E: vanisha.harjani@loebsmith.com
E: edmond.fung@loebsmith.com
E: vivian.huang@loebsmith.com
E: faye.huang@loebsmith.com
E: yun.sheng@loebsmith.com

On the application of the liquidator, the court may make an order where it is satisfied that a director:

1. has misapplied or retained, or become accountable for any money or other assets of the company; or
2. has been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.

The court may make one or more of the following orders against the director, namely that they:

1. repay, restore or account for the money or other assets, or any part of it;
2. pay to the company as compensation for the misfeasance or breach of duty such sum as the court considers just; and
3. pay interest to the company at such rate as the court considers justs.

The court shall not make an order (as stated above) unless it has given the director the opportunity to:

1. give evidence, call witnesses and bring other evidence in relation to the application; and
2. be represented (at their own expense) by a legal practitioner who may put to them, or to other witnesses, such questions as the court may allow for the purpose of explaining or qualifying any answers or evidence given.

On the application of the liquidator, the court may make an order where it is satisfied that, at any time before the commencement of the liquidation of the company, any of its business has been carried on:

1. with intent to defraud creditors of the company or creditors of any other person; or
2. for any fraudulent purpose.

The court may declare that any director who was knowingly a party to the carrying on of the business in such manner is liable to make such contribution, if any, to the company’s assets as the court considers proper.

Any money paid to, assets recovered or other benefit received by the liquidator as a result of an order made are deemed to be assets of the company available to pay unsecured creditors of the company.

On the application of the liquidator, the court may make an order against a person who is or has been a director of the company if it is satisfied that:

1. at any time before the commencement of the liquidation, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation; and
2. they were a director of the company at that time.

The court may order that the person concerned makes such contribution, if any, to the company’s assets as the court considers proper. However, it should be noted that the court shall not make such an order if it is satisfied that after the director first knew, or ought to have concluded, that there was no reasonable prospect that the company would avoid going into insolvent liquidation, they took every step reasonably open to them to minimise the loss to the company’s creditors.

The facts which a director ought to know or ascertain, the conclusions which they ought to reach and the steps reasonably open to them which they ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both:

1. the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company; and
2. the general knowledge, skill and experience that that director has.

Any money paid to, assets recovered or other benefit received by the liquidator as a result of an order made are deemed to be assets of the company available to pay unsecured creditors of the company.

Where a liquidator of a company is appointed by the court, a person who is or has been an officer of the company is deemed to have committed an offence if, at any time whilst an officer or during the period of 12 months preceding the commencement of the liquidation, they have:

1. made or caused to be made any gift or transfer of, or charge on, or has caused, permitted or acquiesced in the levying of any execution against the company’s assets; or
2. concealed or removed any of the company’s assets since, or within, 60 days of the date of any unsatisfied judgment or order for the payment of money obtained against the company.

A person is not guilty of a fraudulent conduct offence:

1. by reason of conduct constituting an offence under sub-paragraph (a) above which occurred more than 5 years before the commencement of the liquidation; or
2. if they prove that, at the time of the conduct constituting the offence, they had no intent to defraud the company’s creditors.

In addition to the above, a disqualification order may be made against a director. A disqualification order is an order that a person shall not, for the period specified in the order, engage in a prohibited activity without the leave of the court. A person engages in a prohibited activity if, inter alia, they are a director of a company. An application for a disqualification order may not be made more than 6 years after the date on which the company concerned became insolvent. However, it should be noted that applications to the BVI courts for disqualification orders tend to be less common that the other applications mentioned in this Briefing because only the Official Receiver (and not liquidator) may apply to the court for a disqualification order against a person.

This publication is not intended to be a substitute for specific legal advice or a legal opinion. For specific advice on the matters covered in this Briefing, please contact your usual Loeb Smith attorney or any of the following: 

E: gary.smith@loebsmith.com

E: robert.farrell@loebsmith.com

E: edmond.fung@loebsmith.com

E: elizabeth.kenny@loebsmith.com

E: vivian.huang@loebsmith.com

E: faye.huang@loebsmith.com

E: yun.sheng@loebsmith.com

The “Travel Rule” refers to a global regulatory requirement for financial institutions, including VASPs, to share information about the originator and beneficiary of cryptocurrency  transactions above a certain threshold. This rule, initially developed by the FATF as Recommendation 16 for combating money laundering and terrorism financing, is applied to virtual asset transactions to promote transparency and improve security within the digital asset ecosystem.

The rule mandates that VASPs collect and transmit identifiable information about the parties involved in a transaction (e.g., name, account number, and address) to the next financial institution in the transaction chain when transferring amounts above the designated limit, often set around US$1,000. This requirement helps law enforcement track potentially illicit transactions, aiming to reduce criminal activity and enhance trust within web3.0 ecosystems.

However, implementing the Travel Rule can be challenging, as blockchain transactions are pseudonymous by nature. VASPs must develop technological solutions to enable information sharing while balancing privacy concerns. Some crypto exchanges and wallet providers are working to establish compliance protocols and technical standards to address these regulatory requirements and support international efforts against financial crime.

In the BVI, the Travel Rule has been incorporated into direct legislation through amendments to the AntiMoney Laundering Code of Practice and the Anti-Money Laundering Regulations (together the AML Regime). VASPs registered under the VASP Act are required to comply with the Regime and will be required to demonstrate how the VASP will comply with them as part of the application process under the VASP Act. These regulations effectively place VASPs under the scope of the FATF’s global AML/CFT framework.

The Guidance offers useful additional information to registered and prospective VASPs on a number of points.

• It is recognised that the Directors and Senior Officers of a VASP are ultimately responsible for ensuring that the VASP adheres to the AML Regime and other applicable laws. The Guidance specifically references section 25 of the VASP Act, which requires VASPs to “take appropriate steps to comply with the requirements of [the VASP Act] and other enactments relating to money laundering, terrorist financing and proliferation financing and shall…put in place appropriate systems and procedures to ensure such compliance”.
• Whilst the Guidance recognises that a VASP may engage a third-party contractor to assist in compliance with the Travel Rule, this does not obviate the VASP of all responsibility. In particular, the Guidance requires that the VASP should risk assess the third-party contractor both prior to engagement and during the continuance of the relationship.
• In addition to compliance with the Travel Rule under BVI laws, VASPs must monitor, on an ongoing basis, the implementation of the Travel Rule in other jurisdictions as part of its continued assessment of counterparty risk.
• VASPs are required to take reasonable steps to ensure that their counterparties in jurisdictions that have not yet fully implemented the Travel Rule can properly receive and handle the necessary information during virtual asset transfers. If a jurisdiction has not fully implemented the Travel Rule, BVI VASPs must retain all relevant transaction data, which can be shared with the FSC and law enforcement agencies.
• Conversely, when receiving funds from a foreign VASP whose jurisdiction has not yet fully implemented the Travel Rule, the BVI VASP should consider all relevant risks (e.g. country risk, missing information etc.) prior to making the virtual assets available to the beneficiary. In such a situation, the BVI VASP could use blockchain  analytics to assist with its risk assessment of the foreign VASP.
• Transfers of virtual assets with a value not exceeding US$1,000 are out-of-scope of the Travel Rule, unless there are reasonable grounds for suspecting the funds/assets being transferred are connected with money laundering, terrorist financing or proliferation financing. Linked transactions, where multiple transfers from the same originator to the same beneficiary occur over a short period, must be treated as linked transactions for regulatory purposes. For example, a number of successive transactions of US$999 between the same originator and beneficiary will be suspect, and VASPs are required to have systems in place which track such attempts.
• Other virtual assets which are out-of-scope of the Travel Rule include transfers where both the originator and the beneficiary hold accounts with the same VASP and transfers between two VASPs who are acting on their own account.
• Transfers where the same individual or entity are both originator and beneficiary (e.g. where the individual or entity has an account with two different VASPs) are within scope of the Travel Rule, as are transfers between entities in the same group of companies.
• The regulations emphasise that VASPs must maintain strong controls to detect missing or incomplete information and ensure appropriate responses. For example, a VASP would be expected to delay or refuse a transfer until the required data is obtained.
• The responsibility for compliance with the Travel Rule extends also to ‘intermediary VASPs’, who participate in transactions without being the originating or beneficiary VASP. These intermediaries must verify that all necessary information is received and fully document any decision to delay or continue affected transactions.
• One of the more challenging areas for VASPs is managing transfers to and from unhosted wallets. Unhosted wallets are not directly linked to a VASP, which complicates the verification of beneficial ownership and control. BVI VASPs are expected to adopt a risk-based approach to assess the risks associated with these transfers. In higher-risk cases, additional verification methods, such as the “Satoshi Test” or “Address Ownership Proof Protocol,” can be employed to verify ownership of
  the unhosted wallet.
• If sufficient information about the ownership and control of an unhosted wallet cannot be obtained, BVI VASPs must block the transfer and report the suspicious activity to the relevant authorities. The importance of robust verification measures cannot be overstated, as they play a critical role in mitigating risks associated with unhosted wallets, which are often used in illicit activities due to their anonymity.

The extension of the FATF Travel Rule to VASPs represented a significant shift in the regulatory landscape for virtual asset businesses. This Guidance, whilst perhaps overdue, is nonetheless welcome. Compliance with the Travel Rule is not only a legal obligation but also a key aspect of maintaining trust in the virtual asset ecosystem and in the BVI as a respected offshore jurisdiction. The BVI’s approach to implementing the Travel Rule reflects a broader trend toward regulatory harmonization, ensuring that VASPs adhere to global standards.

For virtual asset businesses, the implications are clear: robust AML/CFT frameworks must be in place which are sufficiently sophisticated and nuanced to identify and stop attempts to circumvent scrutiny. Such policies also need to include detailed policies on how to handle transfers involving jurisdictions with incomplete Travel Rule implementation or those involving unhosted wallets. These businesses must also stay informed about the evolving regulatory environment, as non-compliance can result in significant penalties and reputational damage, both for the VASP and for the BVI more generally.

The Travel Rule is a crucial tool in the global fight against financial crime. Virtual asset businesses must play their part and take proactive steps to comply with international standards. Given the rapidly evolving nature of virtual assets, staying ahead of regulatory developments will be essential for maintaining compliance and ensuring sustainable growth in the sector.

This publication is not intended to be a substitute for specific legal advice or a legal opinion. If you require further advice relating to the application of the Travel Rule for BVI VASPs, please contact us. We would be delighted to assist.

E: gary.smith@loebsmith.com
E: robert.farrell@loebsmith.com
E. elizabeth.kenny@loebsmith.com
E: vivian.huang@loebsmith.com
E: faye.huang@loebsmith.com
E: yun.sheng@loebsmith.com