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Jersey has introduced legislation that regulates cryptoasset exchanges with an annual turnover of £150,000 (about US$210,000) or more. These exchanges are supervised by the Jersey Financial Services Commission and must comply with anti-money laundering and counter-financing of terrorism laws, including know-your-customer requirements. There is no taxation legislation or rules that specifically apply to cryptoassets, but to help provide clarity, guidance has been issued as to their tax treatment under the existing legislative framework.

I.  Introduction

The government of Jersey has opted not to introduce “a full prudential and conduct of business regime” for cryptoassets, as it considered it was too early to regulate them, given that they are in the early stages of development and doing so could restrict development and innovation.[1]  Instead, it followed recommendations to a 2015 consultation paper to regulate cryptoassets only insofar as necessary to ensure compliance with anti-money laundering laws and to counter the financing of terrorism.[2] Jersey’s anti-money laundering and counter-financing of terrorism (AML/CFT) laws were extended to cover cryptocurrencies, with the changes coming into force on September 26, 2016.[3]  “Virtual currency” is defined in the Proceeds of Crime Act as a currency rather than a commodity, thus enabling it to fall within the preexisting regulatory framework and be regulated by the Jersey Financial Services Commission (JFSC).[4] 

Virtual currencies were also brought within the ambit of the Money Laundering (Jersey) Order 2008,[5] which requires individuals operating a “money service business” to register with the JFSC[6] and comply with the jurisdiction’s AML/CFT laws if they have an annual turnover greater than £150,000 (about US$210,000).[7] These laws require such businesses to adopt policies and procedures to prevent and detect money laundering and terrorist financing, appoint a money laundering compliance officer and reporting officer, and ensure that recordkeeping and customer due diligence measures are implemented,[8] such as know-your-customer measures, prior to entering into a business relationship with a person, or before conducting a “one-off” for all transactions greater than €1,000 (about US$1,220).[9]

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II. Taxation

There do not appear to be specific legislative provisions or rules that apply solely to the taxation of cryptoassets. To help provide clarity, the government of Jersey has issued guidance on the tax treatment of cryptoassets under the existing legislative framework, particularly with regard to the mining of cryptoassets, the exchange of cryptoassets to conventional currencies, and the use of cryptoassets to pay for goods and services.[10]  

Occasional transactions that involve the exchange of cryptoassets resulting in a gain or loss are generally not taxable. The exchange of cryptoassets to and from conventional currencies or other cryptoassets by businesses or entities is subject to income tax if the activity is considered to be trading, or if features of trading are met.[11] Businesses that use cryptoassets in trading transactions are taxable under income tax rules and must convert any transactions to the local currency (sterling).[12] In cases where goods and services are paid for in cryptoassets, the transaction must be converted to the local currency in order to apply the correct amount of goods and service tax (GST).[13]

A. Mining

The government states that income generated from mining cryptoassets on a small or irregular scale are generally not to be considered as a trading activity, and that mining alone does not make a person liable for income tax.[14] Costs associated with mining are also typically not deductible as an expense. Mining accompanied by “trading in cryptocurrency on a sufficiently commercial scale that they would be regarded as trading on application of the ‘Badges of Trade’[[15]] principles”[16] may be an exception to this general rule. Entities that are registered for GST and which receive income from mining cryptoassets are generally considered to be outside the scope of GST, as the government of Jersey does not consider that this is not an activity “in the course or furtherance of business.”[17]

B. Forks, Airdrops, Staking, and Forging

There do not appear to be any taxation legislation or policy in Jersey that specifically applies to forks, airdrops, staking, or forging for proof of stake.

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Prepared by Clare Feikert-Ahalt
Senior Foreign Legal Specialist
January 2021


[1] Chief Minister’s Department, Regulation of Virtual Currency: Policy Document ¶ 1.1 (Oct. 21, 2015), https://perma.cc/9QBL-YQNT.

[2] Id. ¶ 1.2.

[3] Proceeds of Crime (Miscellaneous Amendments) (Jersey) Regulations 2016, R&O 63/2016, https://perma.cc/F2H5-2KNV; Proceeds of Crime (Supervisory Bodies) (Virtual Currency Exchange Business) (Exemption) (Jersey) Order 2016, Rev. Laws of Jersey, https://perma.cc/A8W9-7753.   

[4] Proceeds of Crime Act 1999, sched. 2, part B, ¶ 9, https://perma.cc/K2YU-7KA4

[5] Money Laundering (Jersey) Order 2008, Rev. Laws of Jersey, https://perma.cc/2ENA-U4AQ.

[6] Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008, Rev. Laws of Jersey, https://perma.cc/U5CQ-EQGY.

[7] Money Laundering (Jersey) Order 2008, Rev. Laws of Jersey, https://perma.cc/PT5L-A4X6.

[8] “Customer due diligence measures” are defined in the Proceeds of Crime Act 1999, Sched. 2, Part B, ¶ 3.

[9] Regulation of Virtual Currency: Policy Document,supranote 1, ¶ 1.14.See alsoMoney Laundering (Jersey) Order 2008.

[10] Cryptocurrency Tax Treatment, Gov.je, https://perma.cc/Z5K5-3R68

[11] Id.

[12] Id.

[13] Id.

[14] Id. 

[15] Meaning of ‘Trade’, Gov.je, https://perma.cc/4PR8-F878.

[16] Cryptocurrency Tax Treatment, supra note 10.

[17] Goods and Service Tax (Jersey) Law 2007, art. 6, https://perma.cc/2THK-A2FY. See also Cryptocurrency Tax Treatment, supra note 10.            

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Last Updated: 02/05/2021