Virtual Asset Service Providers National Risk Assessment (2024)

​​Overview

One area of financial services, which is defined by the Financial Action Task Force but is not yet a major part of the Jersey industry, is the virtual asset service providers (VASPs). 

Anyone undertaking a VASP activity in Jersey is subject to the full AML/CFT/CPF regulatory framework including registration with the JFSC. 

The registration process began in 2016 for businesses offering exchange services between virtual assets (VA) and fiat currencies (virtual currency exchange businesses (VCEBs)) and has subsequently been extended to all VASPs.  

Since the VASP risk overview was completed in 2022, the virtual asset sector worldwide has grown. The profile of Jersey VASPs has seen several changes, but the absolute number of registered persons has remained small: from 2022 to early 2024 the sector grew from three registered persons to ten, although not all of those were operational at the time this assessment was completed.

​Key findings

Overall, the risk posed by the sector is as expected with the ML/TF/PF threat and inherent vulnerability relating to VA and VASP activity in Jersey assessed as Medium-High. 

The existing mitigation of ML/TF/PF relating to VA and VASP activity in Jersey is assessed as Medium. 

While this falls within the expectations formed in light of the overview, the volatility and rapid evolution of the sector means that agency, and industry, knowledge of the sector as it evolves, and as the vulnerabilities and threats also evolve, needs to be maintained.

​Next steps

Following completion of this risk assessment several residual risks have been identified along with actions which will contribute to a better understanding of risks posed by VA activity in Jersey, and hence enable more oversight and control. 

These recommended actions are supported by the VASP working group. Lead and supporting competent authorities will be identified and, where appropriate, the actions will be added to the National Action Plan and taken forward through the National Financial Crime Policy and Strategy Cooperation and Coordination Structure.

Virtual Asset Service Providers National Risk Assessment of Money Laundering, Terrorist Financing, and Proliferation Financing​​