Getting ready for the crypto spring

With flexible and commercially minded legislation, an innovative approach to anti-money laundering (AML) compliance, political stability and an internationally recognised securities regulatory regime, the British Virgin Islands (BVI) has established itself as the jurisdiction of choice for a number of initial coin offerings (ICOs).

The ongoing “crypto Winter” has seen a shift of investor focus away from crowd-funded platforms offering utility tokens towards security tokens that seek to provide greater value stability and more predictable investment returns. The BVI was well suited for the first wave of digital assets, and remains well placed to take advantage of the shift to securitising and digitalising common assets when the “Crypto Spring” arrives.

Token regulation

Utility tokens, in their purest form, provide a means of access to a technology platform or service, and derive their value from the demand for that access, rather than from the value of any underlying asset or share in the profits of the venture.

Alison Thomson is an associate at Appleby in Hong Kong and Rebecca Jack is a senior associate at Appleby in the British Virgin Islands. They can be contacted at athomson@applebyglobal.com and rjack@applebyglobal.com