The VASP National Risk Assessment includes:

• residual risk and recommended actions;
• threats;
• vulnerabilities;
• status of recommended actions relating to VASPs in other published risk documents.

The guidance sets out how VASPs can ensure compliance with the travel rule under a range of circumstances.

Among other areas, the note covers:

• Required information to accompany transfers between VASPs
• What to do when transferring virtual assets to and from jurisdictions without the Travel Rule
• Determining transaction values
• Transfers between different legal entities within the same group
• Transfers to and from non-VASPs.

Proposed changes include:

• New guidance in relation to correspondent banking and similar relationships with regards to Virtual Asset Providers (VASPs)
• New Code of Practice and guidance in respect of declassification of Politically Exposed Persons (PEPs)
• Expanded guidance in relation to suspicious activity reporting by Non-Profit Organisations (NPOs)
• Housekeeping matters following the coming into effect of the Proceeds of Crime (Financial Intelligence) (Amendment) (Jersey) Regulations 2022.

The sections affected are: 2, 3, 4, 6-13, 15-17, and also the Glossary.

Deadline for comments is 29 August 2023. 

This will require the following:

• If the VASP was previously registered as a Virtual Currency Exchange Business, it will need to complete the registration form available on the Commisson's website. The application will be treated as a notification. There is a transition period running until 30 June 2023.
• If the VASP has previously notified the Commission 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, it will need to complete the registration form available on the Commission's website. The application will be treated as a new application. There is a transition period running until 30 June 2023. 
• If the VASP is registered under the Financial Services (Jersey) Law 1998 to conduct financial services business, it will need to complete the registration form in relation to its existing virtual asset service provider activity. The Commission will treat the application as a notification. There is a transition period running until 30 June 2023. 
• If the VASP is a new business (which began operating after 30 January 2023), it must register with the Commission before it begins conducting business. The Commission will treat the application as a new application.

AML Service Providers cannot complete an application on behalf of a VASP, the VASP must complete the application form.

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:

(a) Exchange between virtual assets and fiat currencies,

(b) Exchange between one or more forms of virtual assets,

(c) Transfer  of virtual assets,

(d) Safekeeping or administration of virtual assets or instruments enabling control over virtual assets,

(e) Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.

An existing business (operating prior to 30 January 2023) conducting virtual asset service provider activity in Jersey will need to register with the Commission to continue conducting business. This will require the following:

• If the VASP was previously registered as a Virtual Currency Exchange Business, it will need to complete the registration form available on the Commission's website. The application will be treated as a notification. There is a transition period running until 30 June 2023.
• If the VASP has previously notified the Commission 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, it will need to complete the registration form available on the Commission's website. The application will be treated as a new application. There is a transition period running until 30 June 2023. 
• If the VASP is registered under the Financial Services (Jersey) Law 1998 to conduct financial services business, it will need to complete the registration form in relation to its existing virtual asset service provider activity. The application will be treated as a notification. There is a transition period running until 30 June 2023. 
• If the VASP is a new business (which began operating after 30 January 2023), it must register with the Commission before it begins conducting business. The application will be treated as a new application.

Note, AML Service Providers cannot complete an application on behalf of a VASP, the VASP must complete the application form.

It added that although it depends on the precise nature of the activity, in most cases, its framework to date is limited to a ‘Schedule 2’ notification relating to virtual currency exchanges which capture platforms which have an element of fiat currency.