Regulatory Updates

The Financial Services Authority (“FSA”) issued an advisory dated August 30^th, 2019 advising the general public and potential investors to be vigilant when engaging with entities providing services within the Financial Technology (“Fintech”) landscape, including but not limited to services pertaining to virtual assets, such as crypto-currencies and other services that are required to be undertaken only by approved, licensed or regulated persons. It is important to note that a vast majority of these services are being offered over the internet and the operators in question are not based in the Seychelles.

Regrettably, it has recently come to the FSA’s attention that it appears that there continues to be a number of companies purporting to be carrying on businesses and providing services related to the Fintech realm, when they are not authorized to do so. Furthermore, some of these entities are claiming that they are licensed and regulated by the FSA which is not correct.

For clarification purposes, the FSA licences and regulates entities as can be found here only.

The FSA would like to inform the public in general that it has come to be aware that some of these businesses are set up as International Business Companies (“IBCs”) that may be registered in Seychelles. It is necessary to note that being an IBC does not translate that an entity is licensed or regulated by an Authority but rather that it has been set up or incorporated as company in Seychelles. To carry out any activity, the IBC, similar to any legal person, has to have the appropriate authorisations in the form of a licence to carry out specific activities.

As such, this Advisory is being issued in order to alert members of the public and investors alike when it comes to their dealings with such unauthorized service providers. The FSA also strongly advises that the public and investors be aware of the risks that are associated with such services, including but not limited to the potential loss of funds.

The FSA would like to inform members of the public and investors that whilst it is necessary that it is contacted in cases of perceived wrong doing by the service providers in question so that it can carry out necessary enquiries, it would equally like to point out that in such cases it is difficult for the FSA to assist members of the public and investors with some form of redress, such as the retrieval of any funds from the providers concerned, in view that they are not licensed nor regulated by the FSA and often times are not based or conducting the activity in the Seychelles.

Before engaging the services of such companies and any other entities providing services specified herein, it is recommended that investors and members of the public undertake careful due diligence to evaluate the investment opportunity. The following questions, amongst others, should be duly considered:

1. What do I know about this company and the services being offered?
   1. Is the business a company? If yes, where is it incorporated?
   2. Is the business licensed to provide the services being advertised particularly when it includes the taking or holding of client funds?
      
      
2. Does the business itself express or disclose in a clear manner the risks associated with the services being offered? 
   
   
3. Do I understand both the opportunities (i.e. the potential gains) as well as the potential risks (such as, the loss of funds) associated with such services?
   
   
4. Is this company regulated and if yes, by which Regulatory Authority?
   
   
5. Does this company have appropriate Anti-Money Laundering (AML) controls in place?
   1. If yes, under the law of which country/jurisdiction(s) are those controls based on?
      
      
6. What dispute resolution mechanisms exist if there is a dispute with this company?
   1. If yes, which country/jurisdiction(s) is identified as the jurisdiction for dispute resolution.

In light of the above, the public is invited to provide the FSA with any relevant information on any entities purportedly operating in or from within Seychelles, and on any improper activities engaged in by such entities.

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

The Financial Services Authority

Issued on February 12^th, 2021

This advisory is issued by the Financial Services Authority (“FSA”) pursuant to section 4(1)(m) of the Financial Services Authority Act, 2013 (“FSA Act”) and is addressed to the general public and to potential investors in respect to the scope of the FSA’s regulatory function.

Reference is made to the FSA’s alert posted on February 4^th, 2021 on the International Business Company ("IBC"), Mek Global Limited with IBC number 207897 and a recent interview by the FSA that was aired on February 11, 2021. At this point in time, the FSA has deemed it important to convey additional information in relation to the IBC in view of it being aware of certain information being circulated within the public domain that may not necessarily represent the true facts of the case and the position of the FSA on the matter.

With regards to the information available on the public domain concerning an alleged “hack” on the cryptocurrency exchange platform of KuCoin, that apparently took place over the course of 2019 and 2020 the FSA hereby informs the public that whilst it is concerned at the allegations being made involving a Seychelles IBC, it recognizes that the alleged illicit act may have a negative impact on the platform as well as to the users of the platform concerned.    

The FSA would also like to inform the public that the exchange platform appears to be affiliated with the IBC, Mek Global Limited. The FSA wishes to inform the public that enquiries into the affairs of the IBC was initiated in 2019 following receipt of certain information from both domestic and international supervisory counterpart authorities. It is to be noted that the IBC was eventually struck off the Register of IBCs in November of 2020 by the FSA, but is yet to be dissolved.

As part of its procedures in matters such as these the FSA also issued an alert on its website on February 4^th, 2021 to advise the public that whilst the IBC Mek Global Limited was incorporated in Seychelles under the International Business Companies Act, 2016, the company is not regulated or licenced by the FSA to conduct businesses of any type in Seychelles including those that were being offered by the online platform which also made reference to the IBC in question on the platform.

The public is thereby advised that the FSA’s enforcement action (i.e. the striking-off) against the IBC Mek Global Limited was as a result of its own separate investigations and enquiries in the affairs of the IBC and was not in any way linked to the recent publications of the “hack” on the KuCoin platform which has been published recently.

In light of the situation involving KuCoin and the allegations concerned, the FSA would like to inform that whilst it is following the situation closely, it cannot at this point in time provide any positions on the allegations made or on the status of any investigations that could be in progress by any investigative authorities in any state.

All the above said, the FSA hereby draws the attention of the general public and investors to its Advisory in respect to entities claiming to be licensed or regulated by the FSA where the FSA sets out the scope of its regulatory ambit, such that its regulatory oversight extends only to the activities of persons, in or outside of Seychelles, that are licensed or regulated by the FSA under the relevant regulatory legislations. For more information on entities licenced and regulated by the FSA, please click here.

The FSA is cognizant that businesses operating the in sphere of financial technologies, or fintech, is highly susceptible to attacks by cybercriminals. In that regard, the FSA strongly urges investors and members of the public to undertake careful due diligence when evaluating an investment opportunity in fintech and to exercise extreme caution in respect to the services offered by unlicenced and unregulated companies.

The Financial Services Authority

This notice is issued by the Financial Services Authority ("FSA") pursuant to section 4(1)(m) of the Financial Services Authority Act, 2003 in relation to the International Business Company ("IBC"), Mek Global Limited with IBC number 207897.

Through information available in the public domain, Mek Global Limited appears to be affiliated with an online trading platform for virtual assets, namely KuCoin Cryptocurrency Exchange Platform, and is soliciting investors and customers through its website: https://www.kucoin.com/

The FSA hereby informs the public that Mek Global Limited does not hold any licence issued by the FSA to undertake such type of activity. Therefore, the entity is not being regulated by the FSA nor has it been in the past.

The FSA strongly urges investors and members of the public to exercise caution in respect to the services offered by Mek Global Limited.

The Financial Services Authority

04 February 2021

This notice is issued by the Financial Services Authority of Seychelles (“FSA”) drawing attention to the following website: https://lelmm.com/ and the fact that contrary to what is being mentioned on this website’s User Agreement, the entity known as LELMM GLOBAL is not licensed nor regulated by the FSA in any capacity. Details on the website are as follows:

Website:  https://lelmm.com/

LELMM GLOBAL does not hold a valid license of any type from the FSA Seychelles. The entity is not regulated by the FSA Seychelles, nor has it been in the past.

The FSA Seychelles urges investors and members of the public to exercise extreme caution in respect of LELMM GLOBAL.

The Financial Services Authority

The Financial Services Authority hereby gives notice to the general public, pursuant to section 28(2)(c) of the Financial Services Authority Act, 2013 (“FSA Act”), that the securities dealer licence held by Aronex Corporation Ltd has been revoked pursuant to section 29(1) of the FSA Act, effective January 21^st, 2021.

Therefore, note that effective January 21^st, 2021, Aronex Corporation Ltd no longer holds the above mentioned licence.

Financial Services Authority
Bois De Rose Avenue
P.O Box 991
Victoria, Mahe
Seychelles

The National Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Committee, has started work towards its objective of strengthening the Seychelles’ AML/CFT framework.

This notice is issued by the Financial Services Authority of Seychelles (“FSA”) drawing attention to the following website: https://axismarketfx.com/ and the fact that contrary to what is being advertised on this website, the entity known as Axis Market FX. is falsely advertising that they are licensed and regulated by the FSA to conduct business as a Securities dealer. Details on the website are as follows:

Website:https://axismarketfx.com/

Type of licence: Securities Dealer

Axis Market FX. does not hold a valid license of any type from the FSA Seychelles. The entity is not regulated by the FSA Seychelles, nor has it been in the past.

The FSA Seychelles urges investors and members of the public to exercise extreme caution in respect of Axis Market FX.

The Financial Services Authority

November 09^th, 2020

This Circular is being issued with the aim of notifying all stakeholders of the Financial Services Authority’s (“the Authority”) acceptance of electronic documents that have been digitally signed, in accordance with the Seychelles’ legislations.

The Electronic Transactions Act, 2001 provides the framework for the authentication of documents by affixing of digital signatures and the Electronic Transactions (Affixing of Digital Signature) Regulations, 2018 stipulates the requirements for foreign authorities to be recognized as Certifying Authorities. The Recognition of Foreign Certifying Authorities’ Notice published in the Official Gazette on the 14th October, 2019 provides for the list of Certifying Authorities recognized by the Controller of Certifying Authorities.