BVI Finance hosted part one of the webinar series, "Embracing the Crypto Revolution: The BVI's Role in the Global Crypto Ecosystem”, showcasing the BVI as a premier destination for cryptocurrency enterprises and highlighting its robust legal and regulatory frameworks.
The webinar featured a panel of experts: Mr. Ronan Kuczaj, CEO of DTL Solutions; Mr. Lodewijk van Setten, Director and Chief Risk Officer at DLT Solutions and Director and General Counsel at Trili Tech; Ms. Kayla Laidlaw, Tax Director, Deloitte BVI; Ms. Iona Wright, Senior Counsel at Walkers; and Mr. Michael Killourhy, Partner at Ogier. The webinar was moderated by Elise Donovan, BVI Finance CEO.
Donovan began the webinar by highlighting the BVI's significant progress in the virtual assets arena by stating over 60 Virtual Asset Service Providers (VASP) applications are currently under review.
Kuczaj, then discussed trends and developments shaping the global crypto space. He encouraged interactive learning, advising participants to explore educational materials available online and offered book recommendations for a deeper understanding.
van Setten, provided insights into the transformative potential of public computer networks. He emphasized the versatility of blockchain technology beyond tokens, highlighting its applications in various sectors, including finance and intellectual property.
Killourhy, shared his perspective on the opportunities presented by the crypto revolution. He underscored the role of the BVI in attracting businesses involved in virtual assets. He highlighted the jurisdiction's economic stability, corporate flexibility, and a well-established legal infrastructure as key factors contributing to its appeal.
"The BVI Business Companies Act, long celebrated for its flexibility and effectiveness, has evolved to adeptly handle the intricate structures of crypto and digital asset businesses," said Killourhy. This adaptability positions the BVI as a front-runner in accommodating the dynamic needs of the crypto industry.
Panelists encouraged BVI practitioners to deepen their understanding of the cryptocurrency revolution, citing the significant opportunities it presents. “The crypto landscape offers immense potential for growth and innovation. Our local professionals must be well-versed in this area to leverage these opportunities,” he added.
Killourhy also addressed the volatile nature of cryptocurrencies, acknowledging the apprehensions and excitement it generates. “Let’s all cozy up to crypto and embrace it,” he urged. “It’s a realm of high volatility, often making people nervous due to its rapid fluctuations in value. This volatility can lead to substantial financial gains, but also carries risks of equally significant losses.”
Wright emphasized the critical role of regulation in the digital assets space. “It is essential to have strong regulatory frameworks to protect consumers and thwart the misuse of digital assets by bad actors,” Wright stated. She lauded the BVI's proactive stance in the regulatory arena, noting its early and significant engagement between industry stakeholders and regulators. “The BVI has quickly established itself as a crypto-friendly jurisdiction with a commercially savvy yet risk-aware regulator,” Wright added.
She pointed to the BVI's forward-thinking regulatory measures, such as the Guidance on the Regulation of Virtual Assets established in 2020 and the recent Virtual Assets Service Providers Act. These, along with the Securities and Investment Business Act, provide robust legal instruments adaptable to crypto futures and options.
Wright shared insights into the progress of VASP applications, noting the positive response from the industry. With approximately half of the applications already processed, she expressed optimism about the BVI's ability to set regulatory standards and guide new entrants.
Laidlaw contributed to the discussion by highlighting the global regulatory challenges in the digital assets market. “With the rapid expansion of digital assets, international bodies like the OECD are striving to establish effective tax compliance measures for entities in this space,” Laidlaw explained. She focused on the OECD’s Crypto Asset Reporting Framework (CARF), a new tax transparency framework requiring entities to report customer information for global tax authority exchange. Laidlaw pointed out that CARF will primarily be a transactional reporting regime.
Although the BVI is not among the 48 early adopters of the optional CARF, Laidlaw suggested that international pressure might lead to its future implementation. She advised those in the virtual assets business to begin preparations. “Implementing procedures like collecting self-certification forms and tax ID numbers from the start is easier than retrofitting them into an established business,” she advised.
Actionable Strategies for Professionals in the Digital Asset Space
Panelists also shared actionable strategies for BVI professionals looking to engage in the digital asset space.
Kuczaj advised professionals to follow their curiosity and engage with clients in the digital asset space. He also stated the importance of understanding the mechanics of the business, recommending individuals to get a wallet and invest a small amount in cryptocurrencies. Ronan emphasized the significance of the BVI's network of clients and the role of digital assets as liquid venture capital.
van Setten stressed the value of understanding the basics, such as the network, public computer infrastructure, and the significance of protocol tokens like ETH, Tezos, or Bitcoin. He recommended reading and self-education, encouraging professionals to embrace the technology and the BVI's advantages in speed, accuracy, and regulatory certainty. He then highlighted the potential of decentralized finance (DeFi) and non-fungible tokens (NFTs) and advises against shying away from the technology.
Mitigating Risks and Identifying Opportunities
Panelists also weighed in on mitigating risks associated with digital assets, such as volatility, security breaches, regulatory uncertainty, and identifying opportunities.
Killourhy emphasized that embracing new technology involves risk, and legal frameworks are continually evolving, encouraged due diligence and working with regulators to stay compliant and acknowledges the BVI's role in facilitating digital asset structures.
van Setten highlighted the importance of education, understanding the basics of technology, and embracing the startup phase. He encouraged not shying away from the technology's potential and leveraging the low cost of startups. He also noted that as blockchain infrastructure improves, businesses using it will find new and innovative ways.
Kuczaj recommended following curiosity, engaging with clients, and understanding the mechanics of the business. He pointed out that the BVI has an excellent network of clients, providing opportunities for professionals. He also emphasizes the significance of liquid venture capital and the emergence of digital asset businesses.
Wright explained the importance of understanding and complying with regulatory requirements, and stated that businesses ought to engage with legal experts and stay informed about evolving legal frameworks. Iona then pointed out that the BVI's regulatory regime provides certainty for digital asset businesses. While Laidlaw also encouraged that “compliance with international standards ultimately strengthens the industry as a whole.”
Click here to watch Breakfast Forum
Click here to watch the Q&A
Panelist Recommended Reading
- Digital Gold: The Untold Story of Bitcoin by Nathaniel Popper
- Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World by Alex and Don Tapscott
- The Metaverse: And How it Will Revolutionize Everything by Matthew Ball
- The Innovative Investors Guide to Bitcoin and Beyond by Chris Burniske and Jack Tatar