“Today’s announcement of co‑ordinated international action on cryptoassets is a major step forward, marking another important milestone towards the widespread and co-ordinated approach to combat tax evasion through greater transparency and exchange of information,” Secretary-General Cormann said.

“We strongly welcome the extensive support being shown for quick action to make the international exchange of information collected under the OECD standard on cryptoasset reporting a reality. The international community can count on the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes to ensure that the tax transparency architecture remains both up-to-date and effective going forward.”

The Crypto-Asset Reporting Framework (CARF) is a key component of the International Standards for Automatic Exchange of Information in Tax Matters developed by the OECD under a G20 mandate. It provides for the automatic exchange of tax-relevant information on cryptoassets and comes against the backdrop of a rapid adoption of the use of cryptoassets for a wide range of investment and financial uses.

The Commission is consulting on an overall increase in fees of 7.3%. Other specific proposals relating to fees outlined in the consultation paper are:

• an update to the fees for virtual asset service providers within an Actively Managed Certificate structure.
• a rebalancing of fees within the insurance sector on request of the industry body with the aim of making Guernsey’s Special Purpose Insurance sector comparable with others;
• an increase in the regulatory fee when operating an investment exchange within the Bailiwick; and

The consultation closes on 20 September 2023.

Chapter 18 'Virtual Assets' has been added to the Handbook, which provides VASPs with guidance on how to meet their obligations within Schedule 3 and the rules of the Handbook. It also contains rules and guidance on the information required to accompany transfers of virtual assets. 

The guidance in the Chapter is in addition to, and not in place of, the guidance within other chapters of the Handbook. VASPs fall within the definition of a specified business and therefore the Handbook is applicable to such firms. 

Chapter 18 also provides guidance for specified business which are not licensed as VASPs but have business relationships or occasional transactions with a connection to, or involvement with, virtual assets. Examples where this may arise include where a customer’s source of wealth or funds derives from virtual assets, or an investment within a structure administered by a specified business holds virtual assets.

The draft rules and guidance include specific information requirements on originators and beneficiaries of virtual asset transfers and the information requirements on virtual asset transfers of £1,000 (or equivalent value) or less, as indicated in the draft legislation.

Licensed VASPS are required to meet all the provisions within Schedule 3 and the associated rules in the Handbook. The chapter has guidance on how VASPS can apply a risk-based approach and comply with customer due diligence and enhanced customer due diligence measures.

This chapter also includes additional risk factors specific to virtual assets to help VASPs and other licensees which are not licensed as a VASP, but which have business connected to virtual assets, to identify, understand and mitigate specific risks attached to virtual assets when dealing with customers where there is a virtual asset connection.

See the draft legislation here.

See the proposed chapter on virtual sssets here.

The consultation also seeks comments on proposed additional rules and guidance for trustees of trusts and partners (excluding limited partners) of partnerships and limited partnerships without legal personality to hold information on the identity of other regulated agents and service providers to a trust or partnership, and disclose their status as trustee or partner. These rules will apply to licensed trustees and licensed partners.

Deadline for responses is 3 July 2023..

The Lending, Credit and Finance (Bailiwick of Guernsey) Law 2022 was approved in July 2022 and comes into effect on 1 July 2023. Firms carrying on business regulated by the law will need to be licensed and follow the rules set out by the Commission. The law regulates virtual asset service providers, as well as regulating the provision of consumer credit, and replaces The Registration of Non-Regulated Financial Services Businesses (Bailiwick of Guernsey) Law, 2008.

The Commission will accept licence applications from 1 February 2023. 

The Law and accompanying Rules covers, among other topics, Fintech platforms operating crowdfunding and peer to peer platforms as well as virtual asset service providers.  It introduces licensing for a wide range of activities related to crypto.  

Guernsey is introducing these Rules, in part, to ensure it remains compliant with the published expectations of the Financial Action Task Force which has set out detailed guidance on how countries must act to stop crypto being used for criminal purposes. 

The deadline for responses to the Consultation Paper is 15 September 2022.