The Digital Assets Business Act 2020, its amendment and supporting Regulations set requirements administered by the Financial Services Regulatory Commission, known as the FSRC.
A trading platform, a custody provider and a token issuer may require different permissions. Start with a precise description of the services the business will provide.
Digital assets activities and licensing
The Act covers activities including issuing, selling or redeeming digital assets, operating exchanges, payment services and custody. Whether a particular business requires authorisation depends on its activities and any applicable exemption.
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A token's classification as something other than a security does not, by itself, settle that question. A useful initial assessment should explain the assets involved, the services offered, the customers to be served and who controls the funds or private keys. It should also identify the countries in which the business intends to operate or seek customers.
Preparing a digital assets licence application
Before preparing an application, establish the permissions needed for the proposed model. Ownership, management and the source of capital must be documented, alongside the business plan and proposed operating arrangements.
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The application should give the regulator a clear account of how the business will function in practice. Relevant issues may include the handling of client assets, transaction controls, the use of external service providers and the procedures for responding to an operational failure.
Token offerings and disclosure
The Act contains a prospectus regime for relevant issues and offers of newly issued digital assets. Where section 18 applies, a prospectus must be submitted for approval at least 30 days before its proposed publication, and the approved document must be published as required.
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Each potential purchaser must receive the approved prospectus at least five business days before the sale. Approval is valid for no more than twelve months, with renewal addressed by the Act. Review the offering before advertising it or accepting subscriptions; a technical description or white paper does not necessarily meet the statutory requirements.
Local operations and continuing compliance
Licensees are subject to requirements concerning a principal office in Antigua and Barbuda, an approved compliance officer and annual audited financial statements.
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The law also provides for regulatory intervention and revocation in a range of circumstances. The amended framework requires annual reporting on beneficial ownership and control, the reporting of suspicious activity and retention of client transaction records for six years. These duties should be built into the business's staffing and operating budget.
Testing an innovative model
The Regulations provide a sandbox licence for a controlled period. The published schedule describes an initial six-month period with a possible three-month extension. Any proposed testing arrangement should be agreed with the FSRC on the terms applicable to that application.
Costs and tax treatment
An assessment should separate application charges, annual fees, capital or deposit requirements and the cost of professional and operational support. Some regulatory charges are expressed in Eastern Caribbean dollars, so the currency should always be stated clearly.
Tax treatment requires a separate review. Neither a DAB licence nor foreign ownership of a company establishes a general entitlement to tax exemption.
Serving customers internationally
See also our financial services licensing guide for activities involving payments, banking or securities. An Antigua and Barbuda authorisation must be considered alongside the rules of countries in which customers are located.
A local licence should not be treated as a worldwide permission to market financial services or offer digital assets.
Discuss your business model
Send a concise description of your product, the role of the company and the countries you intend to serve. We can help organise an initial discussion with the appropriate professionals. Authorisation and its timing remain matters for the regulator.
Submit a digital assets enquiry
For corporate structures and registration duties, see company formation in Antigua and Barbuda.