Advisory on Virtual Asset Service Providers alleged to be licensed and regulated by the Financial Services Authority

In light of continued situations where entities, predominantly international business companies or IBCs, are pronouncing themselves in the public domain, specifically on the internet, to be licensed and regulated by the Financial Services Authority (“FSA”) for the provision of services linked to virtual assets (“VA”) and virtual asset service providers (“VASP”), including cryptocurrency exchange platforms, the FSA has deemed it necessary to issue this advisory to the public.

The FSA hereby informs the general public and investors alike that it does not license or regulate any persons, particularly IBCs, for the conduct of businesses related to VA and VA services. That is, the FSA does not and has not licensed IBCs for the conduct of services linked to any type of VA, virtual currency exchange platforms and other related or similar services.

Please be reminded that although IBCs are incorporated in Seychelles under the International Business Companies Act, 2016, these entities are not licensed nor regulated by the FSA for the conduct of their chosen business activities. As is the norm for any company, an IBC is required to seek and possess the appropriate authorisation to carry out specific activities in its jurisdiction of operation.

The FSA thus urges individuals looking to engage the services of any entities that claim to provide services in such activities to first perform their own checks and due diligence on these entities, which may or may not be IBCs, and to thoroughly understand the risks involved, such as the loss of funds and the potential difficulty to recuperate these funds, when dealing with such services and entities prior to any engagements.

It is important to highlight that owing to the fact that such entities conduct their activities online and are not under the supervisory and regulatory purview of the FSA, it may be extremely difficult for the FSA to assist in situations where there are any unfair practices by these entities leading to issues including financial losses. Investors and members of the public are therefore advised to be vigilant and exercise caution in respect to the services offered by such entities on the internet.

Notwithstanding the above, the FSA is cognizant of the rising interest in VA and VASP, from both investors and service providers. In that regard, the FSA also wishes to inform the public that following conclusion of National Risk Assessment (“NRA”) on VA and VASP to evaluate the viability, potential benefits and potential challenges associated with having the VA and VASP regime in Seychelles, the necessary legislative reforms are due to be undertaken in order to address these rising issues. For more information on the NRA, please click here.

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The FSA has issued this Advisory pursuant to Section 4(1)(m) of the Financial Services Authority Act, 2013.

The Financial Services Authority