How to Comply with Virtual Asset Business Licensing Requirements in Saint Vincent and the Grenadines

As Saint Vincent and the Grenadines (SVG) strengthens its regulatory framework for virtual asset service providers (VASPs), businesses must align with a comprehensive set of licensing and compliance requirements. These standards focus on financial stability, governance, local presence, and client protection.

External Auditor Requirements

Licensed virtual asset businesses must appoint a qualified external auditor annually. Accepted qualifications include:

• Chartered Accountants

• Certified Public Accountants

• Members of regional accounting bodies

• Other professionally recognized accountants approved by the regulator

Key Auditor Responsibilities:

• Reviewing financial records and preparing audited annual financial statements

• Assessing the effectiveness of internal controls and risk management

• Evaluating AML/CFT compliance measures

• Reporting any significant regulatory breaches or suspicious transactions

Audited financial statements must be submitted within a set timeframe following the financial year-end.

Fit and Proper Requirements for Key Personnel

All individuals in significant roles—including directors, executives, beneficial owners, and senior officers—must meet fit and proper criteria. This includes:

Assessment Areas:

• Financial soundness and stability

• Educational background and relevant industry experience

• Good reputation and high standards of integrity

• Absence of conflicts of interest

• Ethical history in professional and business conduct

Disqualifying Factors:

• Previous involvement in fraud or dishonesty

• Poor compliance history or regulatory sanctions

• Bankruptcy, insolvency, or ongoing financial judgments

• Employment history suggesting misconduct or mismanagement

Applicants should be prepared to provide documentation supporting the suitability of all key individuals.

Capital Requirements and Statutory Deposit

To ensure financial resilience and protect client interests, licensed businesses must maintain a statutory deposit with the regulator. The required amount is based on either a fixed minimum or a percentage of client obligations, whichever is higher.

Accepted Deposit Forms:

• Cash holdings

• Government-issued securities

• Other approved financial instruments

Additional capital or liquidity requirements may be imposed, depending on the business’s risk exposure, operational complexity, and size.

Local Staffing and Operational Presence

Virtual asset businesses operating from outside SVG are required to appoint a Principal Representative who is ordinarily resident in SVG.

Responsibilities of the Principal Representative:

• Overseeing daily operations in the jurisdiction

• Acting as liaison between clients, affiliates, and the regulator

• Submitting regulatory filings and updates

• Advising on compliance matters and responding to official inquiries

Staffing and Technology Expectations:

• Adequately trained and experienced staff

• Technology infrastructure that supports operational integrity

• Security protocols that protect client data and ensure confidentiality

All staff must also meet fit and proper standards.

Additional Compliance Obligations

Beyond licensing and staffing, SVG's regulatory framework outlines several other critical compliance obligations:

Registration Disclosures:

Applicants must provide detailed information about the business, including:

• Corporate structure and business activities

• Details of directors and management

• Policies for AML/CFT, cybersecurity, and data protection

• Risk assessment frameworks and internal controls

Travel Rule and AML/CFT Compliance:

VASPs must:

• Record and retain information about transaction originators and beneficiaries

• Monitor for high-risk or non-compliant transactions

• Implement procedures aligned with international AML/CFT standards

Client Protection Measures:

• Clear systems for asset segregation

• Safeguards to ensure market integrity

• Complaint-handling mechanisms

• Ring-fencing of client assets to prevent misuse

Ongoing Reporting Obligations:

• Quarterly operational reports

• Annual audited financial statements

• Risk management reviews and other reports as directed by the regulator

Insurance Coverage:

Licensed businesses must maintain adequate insurance to cover liabilities that may arise from operational failures or omissions.

Transition Period for Existing Businesses

Businesses already operating in SVG before the regulatory framework becomes fully effective are allowed a limited grace period to comply. During this period:

• Operations may continue temporarily, subject to timely submission of a registration application

• If an application is rejected or withdrawn, operations must cease within a defined period

• The regulator may also order immediate cessation if necessary to protect public interest

Preparing for Compliance: Your Next Steps

To meet SVG’s virtual asset business licensing requirements, VASPs should prioritize:

1. Appointing a qualified Principal Representative based in SVG

2. Engaging a certified external auditor for ongoing compliance

3. Reviewing capital adequacy and preparing the statutory deposit

4. Compiling fit and proper documentation for all key personnel

5. Implementing AML/CFT, cybersecurity, and data protection policies

6. Establishing internal controls for risk management and client asset protection

Need Expert Support?

Navigating virtual asset licensing in Saint Vincent and the Grenadines requires detailed regulatory understanding and strategic planning. Contact our team at Zitadelle AG today to ensure your business meets all compliance standards smoothly and efficiently.