The most pressing question

How is crypto currency recognised and how am I regulated?

If the cryptocurrency coin represents some underlying asset that may generate returns, it would be considered an investment and may be captured under the Securities and Investment Business Act, 2010 (“SIBA”).

According to BVI Financial Services Commission (FSC) Guidance

Where a virtual asset product or service provides a benefit or right beyond a medium of exchange it may be captured under the Securities and Investment Business Act, 2010 (“SIBA”).

On setting up

You can use the International Business Company (IBC) entity to incorporate a BVI entity

Setting up an IBC is a relatively straightforward process.

Name one director and one shareholder (minimum)
Shareholder and director can be of any nationality
No requirements for AGM’s
Shares can be issued in any currency
Annual returns and account audits are not required

As a BVI IBC, you will be able to use this newly formed entity as a Special Purpose Vehicle to structure your initial coin offering/coin issuance (ICO).

On issuing coins

In the BVI, ICOs would not usually fall under the definition of “investment” under the Securities and Investment Business Act 2010 (SIBA). That being said, there is still a possibility that certain forms of ICOs may fall within this definition.

Whether or not your coin falls under the definition of “investment” depends on the coin's characteristics assessed in line with the definitions found in the SIBA.

According to the FSC guidance, cryptocurrency coins “do not in of themselves typically grant the holder rights synonymous with shares”, but nevertheless states that if the coin attaches rights to the holder similar to that of equity interest, the issuance of such a coin would be considered an investment under schedule 1 of the SIBA.

Incorporating in BVI