On the 15 June 2016, the States Assembly in Jersey adopted the draft Proceeds of Crime (Miscellaneous Amendments) (Jersey) Regulations 201 – (Regulations) which introduce a regime for the regulation of virtual currency in Jersey. The regime is expected to come into force in September 2016.
The introduction of this regime demonstrates Jersey’s wish to stay at the centre of technological innovation. At the same time, the Island has recognised the need for appropriate regulation to protect consumers against unacceptable risk and ensure that international standards continue to be appropriately adopted.
What does this mean for you and your business?
The Regulations amend the Proceeds of Crime (Jersey) Law 1999 (POCL), principally to add the activities of carrying on the business of virtual currency exchange within the remit of anti-money laundering requirements. The Financial Services (Jersey) Law 1998 will also be amended to include virtual currency exchange as a regulated business.
Regulated virtual currency exchange activity is the business of providing, to third parties, the service of virtual currency exchange, where the business is not otherwise included in Schedule 2 of the POCL. Virtual currency exchange means the exchange of virtual currency for money in any form, or vice versa. A company providing that service to a connected company will fall outside regulation.
In certain cases, this will require businesses that carry on virtual currency exchange to register with the Jersey Financial Services Commission for that purpose. It is intended that businesses carrying on virtual currency exchange which do not meet the prescribed threshold will simply be required to notify the regulator.
These changes will also mean that the principles of the Money Laundering (Jersey) Order 2008 will apply to anybody acting as a ‘virtual currency exchanger’.