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Anguilla

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#92
Version
Archived
Created
2025-04-12 06:45
Workflow Stage
Live

Executive Summary

Anguilla permits retail cryptocurrency trading under a regulatory framework primarily overseen by the Anguilla Financial Services Commission (AFSC). Key legislation includes the Anguilla Utility Token Offering (AUTO) Act of 2018 and the Anguilla Utility Tokens Exchange Act of 2020, which focuses on utility tokens and exchanges. AML/CFT regulations, aligned with FATF standards, are critical compliance components for licensed entities. Anguilla's approach balances fostering innovation with managing risks in the digital asset sector.

Key Pillars

  • Primary regulator: Anguilla Financial Services Commission (AFSC), responsible for overseeing financial services including digital asset activities [Source 3, 5].
  • Core Compliance: Adherence to AML/CFT regulations, including KYC/CDD procedures, as Anguilla is a member of the CFATF and adheres to FATF standards [Source 3, 10].
  • Licensing: Utility token exchanges and other VASPs operating in or from within Anguilla must obtain a license from the AFSC [Source 2, 17].

Landmark Laws

  • Anguilla Utility Token Offering (AUTO) Act (2018): Regulates Initial Coin Offerings (ICOs), specifically focusing on utility tokens. Requires issuers of utility tokens to register with the AFSC and adhere to disclosure requirements [Source 3, 11].
  • Anguilla Utility Tokens Exchange Act (2020): Mandates that any entity operating a utility token exchange in or from within Anguilla must obtain a license from the AFSC. Subjects these exchanges to regulatory oversight, including rules designed to prevent market manipulation and ensure compliance with international standards [Source 2, 3, 17].
  • Digital Assets Business Bill (2023): Draft legislation aimed at creating a comprehensive VASP regulatory framework aligned with FATF definitions, covering activities like exchange between digital assets and fiat, transfer, and custody [Source 14, 15].

Considerations

  • The Anguilla regulatory framework distinguishes between utility tokens and security tokens [Source 2, 3].
  • VASPs are considered high-risk for money laundering and are subject to AML/CFT regulations, including KYC/CDD procedures [Source 6, 8].
  • Draft legislation (SIFA) considered limiting retail access to cryptocurrencies through fund structures, allowing only approved professional funds to invest [Source 4, 7].
  • A Money Service Business (MSB) offers Bitcoin to customers physically present in Anguilla through an ATM and is required to report transactions to the AFSC monthly [Source 6].
  • A Digital Assets Business Bill 2023 is under consideration [Source 14, 15].

Notes

  • Anguilla enacted legislation regulating digital assets relatively early compared to some regional counterparts [Source 3].
  • The AUTO Act aimed to create a clear regulatory framework for utility token issuers [Source 3].
  • The AFSC has issued warnings about unlicensed entities offering trading in cryptocurrencies [Source 9].
  • Drafts of the Securities and Investment Funds Bill (SIFA) from 2020 and 2022 suggested potential restrictions on retail access to cryptocurrencies through fund structures [Source 4, 7].
  • The Mutual Evaluation Report Anguilla (Adopted June 2024, Published July 2023 data) from FATF/CFATF highlights that VASPs are considered high ML vulnerability [Source 6].
  • A Bill for Anguilla Utility Token Offering Act, 2022 confirms a potential update/replacement of 2018 AUTO Act [Source 18].

Detailed Explanation

Anguilla permits retail cryptocurrency trading within a regulated framework overseen by the Anguilla Financial Services Commission (AFSC). The regulatory landscape began with the Anguilla Utility Token Offering (AUTO) Act in 2018, one of the first legislative efforts globally to regulate Initial Coin Offerings (ICOs), specifically focusing on utility tokens, which grant access to a platform or service, distinct from security tokens, which represent ownership rights [Source 2, 3, 11]. Issuers of utility tokens are required to register with the AFSC and adhere to disclosure requirements outlined in a white paper [Source 11]. The Anguilla Utility Tokens Exchange Act, enacted in 2020, mandates that any entity operating a utility token exchange in or from within Anguilla must obtain a license from the AFSC [Source 2, 3, 17]. These exchanges are subject to regulatory oversight, including rules designed to prevent market manipulation and ensure compliance with international standards [Source 3, 17].

As a member of the Caribbean Financial Action Task Force (CFATF), Anguilla adheres to FATF standards regarding Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) [Source 3, 10]. The Utility Tokens Exchange Act 2020 incorporates measures aligned with the FATF's "Travel Rule" for Virtual Asset Service Providers (VASPs) [Source 3]. VASPs, including exchanges, are considered high-risk for money laundering in Anguilla and are subject to AML/CFT regulations, including Customer Due Diligence (CDD) or Know Your Customer (KYC) procedures [Source 6, 8].

While the AUTO Act and Exchange Act primarily target utility tokens, the AFSC's mandate appears broader. The AFSC oversees the "cryptocurrency market" [Source 5], and it has issued warnings about unlicensed entities offering trading in cryptocurrencies generally, suggesting that licensed trading is permissible [Source 9]. A 2023 FATF report mentioned a licensed Money Service Business (MSB) operating a Bitcoin ATM in Anguilla, facilitating retail purchases and redemptions, subject to reporting requirements to the AFSC [Source 6]. This confirms that regulated retail access to cryptocurrencies beyond just utility tokens exists.

Consultations on a Securities and Investment Funds Bill (SIFA) in 2020 and 2022 included provisions for regulating "Digital Payment Token Services" [Source 4, 7]. Drafts suggested that only approved professional funds could be established to invest in cryptocurrencies or digital assets, potentially limiting retail access through fund structures [Source 4, 7]. However, this seems to be focused on funds and not a direct ban on retail trading. A Digital Assets Business Bill 2023 has also been mentioned [Source 14, 15], suggesting Anguilla is moving toward a more comprehensive VASP regulatory framework aligned with FATF definitions, covering activities like exchange between digital assets and fiat, transfer, and custody [Source 15]. The 2022 Bill for Anguilla Utility Token Offering Act suggests a potential update/replacement of the 2018 AUTO Act [Source 18]. In May 2018, the AFSC issued an investor alert regarding iMarketsLive, indicating they were carrying on business in Anguilla without a license from the commission to carry on the business of trading cryptocurrencies [Source 9].

Summary Points

Here's a bullet-point summary of the Retail Cryptocurrency Trading Status in Anguilla, based on the provided report:

Retail Cryptocurrency Trading Status in Anguilla: Summary

  • Overall Status: Allowed-Regulated

1. Regulatory Bodies and Roles

  • Anguilla Financial Services Commission (AFSC):
    • Primary regulatory body overseeing financial services, including digital asset activities.
    • Responsible for licensing and supervising utility token issuers and exchanges.
    • Oversees the "cryptocurrency market" generally.
    • Receives reports from Money Service Businesses (MSBs) operating Bitcoin ATMs.
  • Caribbean Financial Action Task Force (CFATF):
    • Anguilla is a member.
    • Ensures compliance with FATF standards.

2. Key Legislation and Regulations

  • Anguilla Utility Token Offering (AUTO) Act (2018):
    • Regulates Initial Coin Offerings (ICOs), specifically focusing on utility tokens.
    • Requires registration of utility token issuers with the AFSC.
    • Requires adherence to disclosure requirements outlined in a white paper.
    • A 2022 Bill may update or replace this Act.
  • Anguilla Utility Tokens Exchange Act (2020):
    • Mandates licensing from the AFSC for entities operating utility token exchanges in or from Anguilla.
    • Subjects exchanges to regulatory oversight to prevent market manipulation and ensure compliance with international standards.
    • Incorporates FATF's "Travel Rule" for Virtual Asset Service Providers (VASPs).
  • Digital Assets Business Bill (2023):
    • Moving towards a more comprehensive VASP regulatory framework aligned with FATF definitions.
    • Covers activities like exchange between digital assets and fiat, transfer, and custody.
  • Securities and Investment Funds Bill (SIFA) (Drafts in 2020 & 2022):
    • Included provisions for regulating "Digital Payment Token Services."
    • Suggested only approved professional funds could invest in cryptocurrencies or digital assets.
    • Focused on regulating funds, not necessarily direct retail trading.

3. Requirements for Compliance

  • AML/CFT Regulations:
    • Anguilla adheres to FATF standards regarding Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT).
    • VASPs are considered high-risk for money laundering.
  • Customer Due Diligence (CDD) / Know Your Customer (KYC):
    • Required for VASPs, including exchanges.
  • Licensing/Registration:
    • Entities operating utility token exchanges or other VASP activities must be licensed or registered by the AFSC.
  • Reporting:
    • MSBs operating Bitcoin ATMs must report transactions to the AFSC monthly.

4. Restrictions and Limitations

  • Trading must occur through licensed or registered entities.
  • Draft legislation (SIFA) suggested potential limitations on retail access to cryptocurrencies through fund structures.

5. Recent Developments and Changes

  • Digital Assets Business Bill (2023): Indicates a move towards a more comprehensive regulatory framework for VASPs.
  • FATF Mutual Evaluation Report (2023): Highlights the existence of a licensed Bitcoin ATM, confirming regulated retail access to cryptocurrencies.
  • Potential Update to AUTO Act: A 2022 Bill may update or replace the 2018 AUTO Act.

Full Analysis Report

Report: Retail Cryptocurrency Trading Status in Anguilla

Date: April 12, 2025

Prepared For: Internal Regulatory Assessment Unit

Prepared By: Specialized Financial Regulatory Analyst

Topic: Retail_Trading_Status (Anguilla)

Description: This section assesses whether individual citizens and residents in Anguilla are legally permitted to buy, sell, and hold cryptocurrencies. It details the regulatory environment surrounding this activity, including relevant laws, oversight bodies, and specific requirements like KYC/AML imposed on platforms.

1. Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Anguilla permits retail cryptocurrency trading but has established a specific regulatory framework primarily focused on certain types of digital assets and service providers. The jurisdiction has taken a proactive approach, enacting legislation relatively early compared to some regional counterparts, aiming to foster innovation while managing risks.

The Anguilla Financial Services Commission (AFSC) is the primary regulatory body overseeing financial services, including activities related to digital assets [Source 3, 5]. Anguilla's legislative framework began with the Anguilla Utility Token Offering (AUTO) Act in 2018 (potentially updated or intended to be updated by a 2022 Bill [Source 18]), which was notable for being one of the first global legislative efforts to specifically regulate Initial Coin Offerings (ICOs), focusing on utility tokens [Source 3, 11]. This Act distinguishes utility tokens (which provide access to a platform or service) from security tokens (which represent ownership, profit share, or creditor rights) [Source 2, 3]. Issuers of utility tokens must register with the AFSC and adhere to disclosure requirements outlined in a white paper [Source 11].

Building on this, Anguilla enacted the Anguilla Utility Tokens Exchange Act in 2020 [Source 2, 3]. This legislation mandates that any entity operating a utility token exchange in or from within Anguilla must obtain a license from the AFSC [Source 2, 17]. These exchanges are subject to regulatory oversight, including rules designed to prevent market manipulation and ensure compliance with international standards [Source 3, 17].

Crucially, Anguilla is a member of the Caribbean Financial Action Task Force (CFATF) and adheres to FATF standards regarding Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) [Source 3, 10]. These requirements extend to the digital asset sector. The Utility Tokens Exchange Act 2020 incorporates measures aligned with the FATF's "Travel Rule" for Virtual Asset Service Providers (VASPs) [Source 3]. VASPs, including exchanges, are considered high-risk for money laundering in Anguilla and are subject to AML/CFT regulations, including Customer Due Diligence (CDD) or Know Your Customer (KYC) procedures [Source 6, 8].

While the initial legislation (AUTO Act and Exchange Act) specifically targets utility tokens, the AFSC's mandate appears broader. Its mission includes overseeing the "cryptocurrency market" [Source 5], and it has issued warnings about unlicensed entities offering trading in cryptocurrencies generally, implying that licensed trading is permissible [Source 9]. Furthermore, a 2023 FATF report noted the existence of a licensed Money Service Business (MSB) operating a Bitcoin ATM in Anguilla, facilitating retail purchases and redemptions, subject to reporting requirements to the AFSC [Source 6]. This confirms that regulated retail access to cryptocurrencies beyond just utility tokens exists.

There was also consultation on a Securities and Investment Funds Bill (SIFA) (drafts noted in 2020 and 2022) which included provisions for regulating "Digital Payment Token Services" [Source 4, 7]. Notably, these drafts suggested that only approved professional funds could be established to invest in cryptocurrencies or digital assets, potentially limiting retail access through fund structures [Source 4, 7]. However, this appears to be draft legislation focused on funds and doesn't necessarily represent a ban on direct retail trading via licensed exchanges or other VASPs. More recently, mention has been made of a Digital Assets Business Bill 2023 [Source 14, 15], suggesting Anguilla is moving towards a more comprehensive VASP regulatory framework aligned with FATF definitions, covering activities like exchange between digital assets and fiat, transfer, and custody [Source 15].

In summary, retail individuals in Anguilla are permitted to trade cryptocurrencies, but this activity is regulated. Trading must occur through entities licensed or registered by the AFSC (like utility token exchanges or other licensed VASPs/MSBs), which are obligated to comply with AML/CFT regulations, including KYC procedures. While the legislative framework initially focused heavily on utility tokens, regulatory oversight and practice encompass a broader range of cryptocurrencies and VASPs.

3. Relevant Text Excerpts:

  • On Regulation and AFSC Oversight: "Anguilla is one of a few Caribbean jurisdictions that have enacted progressive regulatory frameworks in recent times to govern cryptocurrency ownership and trading... Anguilla's financial regulator is the Anguilla Financial Services Commission (AFSC)..." [Source 3]
  • On Utility Token Regulation (AUTO Act): "The AUTO Act aims to effect a clear regulatory framework by which utility token issuers can be registered and supervised by the Anguilla Financial Services Commission (AFSC)." [Source 3] "Section 4 of the AUTO Act states only registered issuers may offer initial and secondary utility token offering." [Source 2]
  • On Exchange Regulation (Exchange Act): "Once registration takes place the Utility Tokens Exchange Act 2020 requires an issuer to obtain a license from the AFSC to operate a utility token exchange in or from within Anguilla." [Source 2] "The latest Act [Utility Tokens Exchange Act 2020] builds on the AUTO Act by establishing a comprehensive framework for the licensing of Utilities Token Exchanges (referred to as VASPs by the FATF)." [Source 3]
  • On AML/CFT Application: "Anguilla is a member of the Caribbean Financial Action Task Force (CFTAF), a FATF-style regional body that develops anti-money laundering (AML) and combating the financing of terrorism (CFT) policies... in accordance with the Financial Action Task Force (FATF)'s 40 Recommendations, such as its 2019 Travel Rule for exchanges." [Source 3] "Five (5) sectors were given very high ML vulnerability ratings comprising... virtual asset service providers." [Source 6] "Anguilla Offshore Companies involved in cryptocurrency must implement appropriate AML and CTF policies and procedures... Know Your Customer (KYC) procedures are essential..." [Source 8]
  • On Permissibility & Warnings: "The Anguilla Financial Services Commission (the 'Commission') is informing the public that iMarketsLive... are carrying on business in Anguilla but are not licensed... by the Commission to carry on the business of trading... cryptocurrencies... Investors should be aware of the risks associated with unregulated investment business." (Implies regulated business is permitted). [Source 9]
  • On Retail Access (Bitcoin ATM): "A licensed MSB offers bitcoin to customers physically present in Anguilla. Transactions are done through an ATM... This MSB is required to report to the AFSC monthly on its transactions, including the names of the persons engaging in the transactions..." [Source 6]
  • On Potential Broader Regulation (Digital Assets Bill): "Anguilla has a Utility Token Act 2018 and are currently undergoing consultations for a Digital Assets Business Bill 2023." [Source 14] The draft defines "digital asset service provider" activities including "(a) exchange between digital assets and fiat currencies. (b) exchange between one or more forms of digital asset. (c) transfer of digital assets..." [Source 15]
  • On Potential Fund Restrictions (Draft SIFA): "Of note, only approved professional funds can be established to invest in cryptocurrencies, digital payment tokens or other digital assets or carrying on any other digital payment token service in or from within Anguilla." (From 2020/2022 draft bill consultation notes). [Source 4, 7]

4. Source URLs:

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