Virgin Islands (U.S.)

**Report on the Current Status of Retail Cryptocurrency Trading in the U.S. Virgin Islands**

**Date:** 2025-06-26

**Topic:** Retail_Trading_Status

**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

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**Section: Retail_Trading_Status**

**1. Identified Current Status:** Allowed-Regulated

**2. Detailed Narrative Explanation:**

Retail cryptocurrency trading, encompassing the buying, selling, and holding of cryptocurrencies by individual citizens and residents, is permitted in the U.S. Virgin Islands (USVI). However, this activity is subject to a complex interplay of U.S. federal regulations and the local USVI regulatory stance. While the USVI itself has not established a specific licensing or comprehensive regulatory framework for cryptocurrency businesses, U.S. federal laws and regulations apply to the territory. This means that entities facilitating cryptocurrency transactions for USVI residents are generally subject to federal oversight, particularly concerning Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) obligations.

Historically, the U.S. Virgin Islands has been an unincorporated territory of the United States. As such, federal laws, including those pertaining to financial services and securities, generally extend to the USVI. Key federal agencies like the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) have asserted jurisdiction over various aspects of the cryptocurrency market. FinCEN, for instance, requires money services businesses (MSBs), which can include cryptocurrency exchanges and administrators, to register and comply with AML/KYC (Know Your Customer) requirements. This federal mandate applies to businesses serving USVI residents.

In 2022, the Office of the Lieutenant Governor of the U.S. Virgin Islands, specifically the Division of Banking, Insurance and Financial Regulation, issued Bulletin 2022-01. This bulletin clarified the Virgin Islands Banking Board's position regarding the licensure of entities performing cryptocurrency services. It stated that "the Virgin Islands has no laws, rules and regulations governing cryptocurrency services; and the licensure and regulation of cryptocurrency services do not fall under the existing money transmission provisions of the Uniform Money Services Act." Furthermore, the bulletin indicated that "cryptocurrency is: (1) a non-licensed product in the Territory, (2) not specifically authorized under Title 9, Virgin Islands Code to be used in the United States Virgin Islands and (3) not regulated by the Banking Board and the Division." Consequently, the Banking Board announced it would "not approve or consider any money transmission application for licensure, wherein the entity performs cryptocurrency services only."

This local stance means that while individuals are not prohibited from engaging in retail crypto trading, businesses specifically offering cryptocurrency services cannot obtain a local money transmitter license *for those specific services* within the USVI under the current framework. However, this does not negate the applicability of overarching U.S. federal laws. Therefore, cryptocurrency exchanges and platforms accessible to USVI residents are still expected to adhere to federal AML/KYC requirements, and the SEC or CFTC may consider certain cryptocurrencies or crypto-related activities as securities or commodities, respectively, bringing them under their regulatory purview.

The Conference of State Bank Supervisors (CSBS), of which the U.S. Virgin Islands is a member, has also been involved in developing model regulatory frameworks for virtual currencies, although the USVI has not enacted specific legislation based on these models. The CSBS Money Transmission Modernization Act, for example, aims to harmonize standards, including for cryptocurrency transmission. While some U.S. states have adopted versions of this Model Act, the USVI's direct adoption or specific local crypto regulations remain to be seen.

Therefore, the status is "Allowed-Regulated" because, despite the absence of a specific USVI licensing regime for crypto businesses, the activity of retail trading itself is not banned for individuals, and U.S. federal regulations (such as AML/KYC) apply to service providers. This creates a regulatory environment where trading is permitted but subject to the existing, broader U.S. financial regulatory landscape. Recent federal actions in 2024 and early 2025 have seen U.S. banking regulators withdraw some previous restrictive statements, potentially allowing banks more freedom to engage with digital assets under proper risk management, which could also influence the ecosystem in U.S. territories.

**3. Specific, Relevant Text Excerpts:**

*   **Office of the Lieutenant Governor, U.S. Virgin Islands, Bulletin 2022-01 (January 20, 2022):**
    *   "At present, the Virgin Islands Uniform Money Services Act as prescribed does not provide the regulatory framework needed to license and regulate the business of cryptocurrency services. Specifically, the Virgin Islands has no laws, rules and regulations governing cryptocurrency services; and the licensure and regulation of cryptocurrency services do not fall under the existing money transmission provisions of the Uniform Money Services Act."
    *   "As such, the Banking Board has determined the following, cryptocurrency is: (1) a non-licensed product in the Territory, (2) not specifically authorized under Title 9, Virgin Islands Code to be used in the United States Virgin Islands and (3) not regulated by the Banking Board and the Division."
    *   "To that end, the Banking Board will not approve or consider any money transmission application for licensure, wherein the entity performs cryptocurrency services only."

*   **Vertexaisearch.cloud.google.com (referencing general U.S. regulatory applicability):**
    *   "As a territory of the United States, the legal framework for the crypto industry in the US Virgin Islands (USVI) is primarily based on US federal laws and regulations related to cryptocurrencies."
    *   "This includes regulations from agencies such as the Securities and Exchange Commission (SEC) and the Financial Crimes Enforcement Network (FinCEN), which regulate aspects of the cryptocurrency industry such as initial coin offerings (ICOs) and anti-money laundering (AML) compliance."

*   **Faisal Khan (on U.S. Cryptocurrency Regulations in 2025):**
    *   "Each of the 50 states, Washington D.C., and U.S. territories—such as Guam, Puerto Rico, and the U.S. Virgin Islands—has its own set of laws governing money services businesses (MSBs), virtual currencies, and crypto assets."
    *   "At the federal level, MSBs and virtual currency service providers must adhere to regulations enforced by agencies like the Financial Crimes Enforcement Network (FinCEN) and the Treasury Department's Office of Foreign Assets Control (OFAC). These include registering with FinCEN and complying with anti-money laundering (AML) and know-your-customer (KYC) requirements."

**4. Direct, Accessible URL Links to Specific Sources:**

*   **Bulletin 2022-01 Licensure and Regulation of Cryptocurrency Services in the United States Virgin Islands - Office of the Lieutenant Governor:** [https://ltg.gov.vi/wp-content/uploads/2022/01/Bulletin-2022-001-Cryptocurrency-Services.pdf](https://ltg.gov.vi/wp-content/uploads/2022/01/Bulletin-2022-001-Cryptocurrency-Services.pdf) (Note: While the direct PDF link was part of the search result, the primary domain is ltg.gov.vi. The grounding API provided a redirect which is used here: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQG2a-dfK7qLv21P_RHuEqMQUexYfA45p9S05RV3U7nE3Ha0PxWLdtk6p7T0-3RtOMlIT-21Z9eHZru3VPq4hs04QNRnM3ND8GaLBhUnS9la-YjHkAqCDIs8hLUhU3VVmnhB-RJb8ZMr3lycHDwhZEB03lYI61b73LjT-U28Ud9GUre1oTjAPrRYKfAISuweHJFG5nLz4Watvp9zb7uR1DnhNM246Y6PDL0l7fXCJ626nDsZIujjOmLuV8ZFPioDQMO3NTI6jC9OPwcRmcC9ro0p1KNtg_7r)
*   **Top crypto destinations in the world. Legal framework, established ecosystem, regulations and fees (Vertex AI Search result with relevant USVI information):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHlxbu_K1GxK28rxJLIKpA-L-XKSNT83282ULFx4S0ff1B02hsp9A7UEBQrCzk0kASa29KvExtpA6Es1NB_Ftsb3CPTMoo_S5EdJErgmr889kJWKOxeoXwSwZ6H-6NJ18sZGcwFvEMVw8Oa_ZD-mIQgG6RjxPfly0DnYyPmRi7lNWKTpe4j](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHlxbu_K1GxK28rxJLIKpA-L-XKSNT83282ULFx4S0ff1B02hsp9A7UEBQrCzk0kASa29KvExtpA6Es1NB_Ftsb3CPTMoo_S5EdJErgmr889kJWKOxeoXwSwZ6H-6NJ18sZGcwFvEMVw8Oa_ZD-mIQgG6RjxPfly0DnYyPmRi7lNWKTpe4j)
*   **The US Virgin Islands Cryptocurrency Regulations - Freeman Law (June 4, 2021):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGoY6cHyy3-0Gu4miiPjCwg2iV5w2QVDP362Ia5M-1uRgMqnv6XnW1hdBvQ9J99OiJRs62vBEM-n0uGA2aXCp7NPRxcMSH5Hy7o11UWujPD_0Gy9ZB5sNs-AAdWoJyH-w6ZIzhtScSKnJcbYRpRHKh05F25RF9NKLw=](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQGoY6cHyy3-0Gu4miiPjCwg2iV5w2QVDP362Ia5M-1uRgMqnv6XnW1hdBvQ9J99OiJRs62vBEM-n0uGA2aXCp7NPRxcMSH5Hy7o11UWujPD_0Gy9ZB5sNs-AAdWoJyH-w6ZIzhtScSKnJcbYRpRHKh05F25RF9NKLw=)
*   **Understanding US Cryptocurrency Regulations in 2025 - Faisal Khan (February 10, 2025):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQE1GQnJDhY0tGbRhjHg0JZVIxlTDhHGNIF28U93v-i4mOEGHRkab5CUDmrvEeR_IuNSa4chkGapYIIUPrwvnLW_-PkyfYOmF3cZqAJlQId53BDzESic08mpaj3IINkFMyaCFBLhxGgLcZZGZDbcGOmSngn8YBrd7M1KervBbQjoj_z9yzWVZth0ggENHMC2Fse4fQt5lQty8UfLtlq2EZVwqw==](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQE1GQnJDhY0tGbRhjHg0JZVIxlTDhHGNIF28U93v-i4mOEGHRkab5CUDmrvEeR_IuNSa4chkGapYIIUPrwvnLW_-PkyfYOmF3cZqAJlQId53BDzESic08mpaj3IINkFMyaCFBLhxGgLcZZGZDbcGOmSngn8YBrd7M1KervBbQjoj_z9yzWVZth0ggENHMC2Fse4fQt5lQty8UfLtlq2EZVwqw==)
*   **On Cryptocurrencies - CSBS.org (September 27, 2021):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFIkPSipFycrY3zBPE2gDYoEb1Njvip3EaYIT-v0kQ62qgcCFiIUMtg7tKSSnt-MKViwI0tBJaN_sUyx5Yfz812MmdHvIjEScYkt98jzcID-iayJq0lr8gCxgpSu1_f1bRDP_J7IiSiXoSqpNbEOQ4jDgaJRpZ8nc3rG2Myp1PLWKc614FMAgA=](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFIkPSipFycrY3zBPE2gDYoEb1Njvip3EaYIT-v0kQ62qgcCFiIUMtg7tKSSnt-MKViwI0tBJaN_sUyx5Yfz812MmdHvIjEScYkt98jzcID-iayJq0lr8gCxgpSu1_f1bRDP_J7IiSiXoSqpNbEOQ4jDgaJRpZ8nc3rG2Myp1PLWKc614FMAgA=)
*   **US States Adopt Model Money Transmission Act, but Harmonization Remains Elusive - Sidley Austin LLP (August 20, 2024):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQED4jVSkK1aX_gE5ru66fn09XXdrbjx5rmp1QzX8jcmUNbBm59RwrpGdqbDj0LOTHHmXpYIiLve-XZlBLaeq0G-a_n6yDNP7_z-d0c-U8KDygmYKx_jCk8XIhEsc9BUFQJvDCnW8Z5VmqbZ_iGbmZADiRnbTb7ko7x5mnBmC5VohglDTcNMfiYBFYACAzPBJfcgzuDOzTPogOtevh5QItM4jPj0onceakrtTR_QocybnKnXVlu4g_7di5Od6Yfp](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQED4jVSkK1aX_gE5ru66fn09XXdrbjx5rmp1QzX8jcmUNbBm59RwrpGdqbDj0LOTHHmXpYIiLve-XZlBLaeq0G-a_n6yDNP7_z-d0c-U8KDygmYKx_jCk8XIhEsc9BUFQJvDCnW8Z5VmqbZ_iGbmZADiRnbTb7ko7x5mnBmC5VohglDTcNMfiYBFYACAzPBJfcgzuDOzTPogOtevh5QItM4jPj0onceakrtTR_QocybnKnXVlu4g_7di5Od6Yfp)
*   **U.S. Regulators Give Banks the Green Light for Digital Asset Activities - Chainalysis (May 8, 2025):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFnIYofesdz-AreIBewVO2_1EMLoaINCHfBFH0xsM2HG2nVzihtWM0h-Z8qeraJknCtL1_nFfwrtW54YqkXSjBkJ8VSxRqfsmRyCzJZDVBQRYT22m7OLhkczE2wMPM2CzzB-IDgeoWGnvtDYwOIIBUIGCGuRg==](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFnIYofesdz-AreIBewVO2_1EMLoaINCHfBFH0xsM2HG2nVzihtWM0h-Z8qeraJknCtL1_nFfwrtW54YqkXSjBkJ8VSxRqfsmRyCzJZDVBQRYT22m7OLhkczE2wMPM2CzzB-IDgeoWGnvtDYwOIIBUIGCGuRg==)
*   **FDIC Clarifies Process for Banks to Engage in Crypto-Related Activities - FDIC (March 28, 2025):** [https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHmGlkarqvyyRnwxNF0ZlErxNgcYrm5vYy9z-mnAUkh1RT5JzLwweeWTGDAjDOzdz0DCFS9r8jZTOsFRGKW5qcIykge73E17rxktYHomBtwJiWa4Kw-DB8r_BvTx7Cs1F_GeiAW0hBohCsmmfItBazlcIeXUjD-VJUXSURMyYmB2BcVEWfiybMO7VoUZTlhE9ig5L5GTkolY5InntkreJcyOA6KR2KwkHW79w==](https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQHmGlkarqvyyRnwxNF0ZlErxNgcYrm5vYy9z-mnAUkh1RT5JzLwweeWTGDAjDOzdz0DCFS9r8jZTOsFRGKW5qcIykge73E17rxktYHomBtwJiWa4Kw-DB8r_BvTx7Cs1F_GeiAW0hBohCsmmfItBazlcIeXUjD-VJUXSURMyYmB2BcVEWfiybMO7VoUZTlhE9ig5L5GTkolY5InntkreJcyOA6KR2KwkHW79w==)