FAQs

The VASP Act applies to all persons that intend to or is currently providing virtual asset services in or from within Seychelles and all persons issuing Initial Coin Offerings (ICOs) and issuing Non-Fungible Tokens (NFTs). These include any Seychelles’ resident individual or any Seychelles registered or incorporated entity.  

Only domestic companies and International Business Companies are eligible to apply for a Virtual Asset Service Providers Licence.

Individuals are expressly ineligible.

No. Licensing is required by the mere fact that the entity is registered or incorporated in Seychelles (regardless of where the virtual asset services are being undertaken from). Once licensed the company is required to meet the substance requirement as per the Third schedule of the Act.

IBCs offering VASP or related services are required, prior to any service offering being made in a foreign jurisdiction, to ensure that there is no licence or authorisation required. If a country requires further authorisation in order to offer their services, said IBC must do the necessary to obtain such authorisation.

Yes. The Virtual Asset Service Providers Act, 2024 prohibits the operation of mining facilities,  mixers and tumblr service.

All existing VASPs  undertaking a named prohibited activity under the VASP Act must cease to undertake such activity by the 31^st December 2024. New entities, having no previous operational history is expressly forbidden from undertaking any of the prohibited activities.

If such an activity is permissible under a foreign licence, the applicant/ licensee must, in a prominent manner (i.e. on its website, office or any other advertising), indicate that such activity is not covered under its Seychelles issued licence and will therefore not be subject to the consumer protection laws in the Seychelles.

If an applicant submits an application after the commencement date of the law, approval and issuance of a licence will be required prior to the commencement of any business or service offering.

Only Seychelles entities (i.e. Domestic company or IBCs) operation prior to the commencement of the law may continue operating post the 31^st December 2024, provided that a completed application has been received.

Yes. Persons providing virtual asset services prior to the Act coming into force may continue to provide such services on the condition that a  complete application for licence or registration is received by the FSA by the 31^st December, 2024.

No. Persons found to be operating post the 31^st December 2024 and having failed to submit a complete application will be in breach of the Virtual Asset Service Providers Act, 2024 and subject to enforcement action, including but not limited to strike off the name of the IBC or domestic company off the register, imposition of fines/ penalties and relevant court actions.

In addition to the VASP Act, all persons providing virtual asset services are required to comply with the Anti-Money Laundering and Countering the Financing of Terrorism Act (AML/CFT Act) in view that they are defined as a reporting entity under that Act

Furthermore, virtual asset service providers must comply with the requirements of the Financial Consumer Protection Act, 2022.

This will depend on the other business activities being undertaken by the VASP. Some VASPs may engage in multiple business activities, which may require licensing, registration or authorisation under other regulatory legislations (in line with current practice).

Any queries can be address to the vass@fsaseychelles.sc.

There are 4 types of permissible activities  prescribed under the First schedule of the VASP Act.

1. Virtual Asset Wallet Providers
2. Virtual Asset Exchange
3. Virtual Asset Broking
4. Virtual Asset Investment Providers

On a successful application, the applicant will be required to pay the base fee, which is SCR75,000 plus the associated fee for each permissible activity which the applicant wishes to undertake.

Example: If an applicant wishes to offer Virtual Asset Exchange services and Virtual Asset broking; the fee payable will be the base fee + the fee for Virtual Asset Exchange + the fee for Virtual Asset Broking.

The applicable fees are prescribed under the Second schedule of the VASP Act.

Applications not granted in January, February or March will be subjected to a pro rated licence fee on a quarterly basis. This means the fee payable will be calculated having regards to the quarter in which the licence was first granted.

All licences are perpetual unless suspended, revoked or surrendered,

However, in order to remain valid (i.e. for an licensee to continue operating) on or before the 1^st of January of every year, subsequent to having been issued the licence, the renewal fee (which is the same as what was paid on the first granting of the licence) and the lodgement of the compliance form.

Failing to meet these requirements is grounds for revocation of a licence.

An application for license or registration must be submitted to the Financial services Authority

By Post:    

            Virtual Asset Service Section

            Financial Services Authority

           P.O. Box 991

           Bois De Rose Avenue, Mahé

           Republic of Seychelles

Website:    Submit Application tab under VASP on the FSA Website

By e-mail:  Vass@fsaseychelles.sc

The documents or information required to apply for a licence are detailed out in the “Guidelines for Licence Application under VASP Act”.

An IRA is a requirement under Seychelles’ AML/CFT Act. A copy of this legislation can be found here [https://fsaseychelles.sc/aml-cft/amlcft]. All reporting entities are required to take measures to identify, assess, understand and monitor its risks of money laundering and terrorist financing activities and take appropriate measures to mitigate the risks identified, in accordance with the requirements of section 32 (1) of the AML/CFT Act. Furthermore, all reporting entities shall document the outcome of the risk assessment and regularly update it. While the document (IRA) should reflect the nature size and complexity of the applicant's business, it should, at a minimum, reflect:

• Assessment of risks categories specified under section 32 (2) of the AML/ CFT Act.
• The AML/CFT IRA guidelines issued by the FSA (https://fsaseychelles.sc/aml-cft/amlcft)
• Consideration of the risk level reported in the 2022 Overall National Risk Assessment (ONRA) concerning potential financial crime risks linked to virtual assets (VA) and virtual asset service providers (VASPs);
• Controls applied to mitigate the risks it has identified and assessed, including all technology used as part of its control framework, and any outsourcing of these activities inside a group which the applicant belongs or an external party; and
• Consideration has been given to ensuring that the controls applied meet the requirements of Seychelles’ AML/CFT requirements and are not simply a description of control requirements required by another jurisdiction.

All applicants will be required to submit a completed IRA with their application. For applicants who have yet to commence operations, they must still complete an IRA, to demonstrate their understanding of and awareness about the potential financial crime risks to which their planned business activities could be exposed.

The AML/CFT Act requires that applicants appoint a compliance officer 30 days within commencement of operations.  However, applicants must submit the name and resume of the proposed compliance officer and alternate compliance officer whilst submitting their licensing application.

As part of the authorization process, the Authority will require that applicants demonstrate that the controls it applies to mitigate financial crime risks reflects the risks assessed in its IRA. An applicant will also be expected to demonstrate that both the procedures and processes it applies are documented and instructed to its staff by way of training and that testing is undertaken to verify that the procedures are being applied and are effective in mitigating the targeted risk.

Applicants may therefore be required as part of the application process to provide a live demonstration of the systems it applies to mitigate the risks assessed in its IRA, including but not limited to, systems used to verify customer identity during the onboarding process, technology used to undertake transfer or transaction activity, systems used for counterparty due diligence and the detection and investigation of suspected illicit activity.

The type of systems or controls that applicants may be asked to provide a live demonstration for will depend upon the type of VASP activities for which a licence is sought, and the nature, size and complexity of the applicant's operations.

VASPs will be expected, both when applying for authorization and throughout the period in which they conduct authorised VASP activities, to have in place appropriate and effective controls to monitor VA transfers and transactions.

The onus will be placed upon the applicant or VASP to demonstrate the controls it applies to conducting these activities are appropriate and effective at detecting and preventing the misuse of its transfer and transaction activities, taking account of the nature, size and complexity of its operations.

Activities for which these controls will need to be in place include, but will not be limited to, an applicant conducting trading involving the receipt of customer funds in the form of fiat in order to purchase the VA on their behalf, or the receipt of VA transfers, will be expected to use an appropriate tool through which to verify a customer or client's source of funds and the origin of the proceeds transferred.

As part of the authorization process, the Authority may request that the applicant demonstrate the technology or tools it employs for the monitoring and investigation of transfers and transactions.

The paid-up capital can be found in Schedule 1 of the Virtual Asset Service Providers (Capital Adequacy and other Financial Requirements) Regulation, 2024 and it includes capital requirements for existing operating entities and new entities.

Payment of the applicable fees can be made directly to the Authority’s bank account simultaneously to submitting the application form.

Account Name:             Financial Services Authority

Bank:                              Nouvobanq (SIMBC)

Bank Address:               Nouvobanq House

                                      Victoria, Mahe

                                       Seychelles

Account Number:   01 00 200 87 97 00 1 SR

SWIFT Code:        NOVHSCSC

The applicant must provide the Authority with proof of payment.

The FSA will only start processing an application when all required documents have been submitted and payment of the application fee has been made.

Incomplete applications will be refused by the Authority and the application fee forfeited.

The issuer must register the offering, and there is no restriction as to who can be an issuer.

The Virtual Asset Service Providers Act, 2024 restricts promoter to licensed VASPs or entities licensed under the Securities Act, 2007.

An offering cannot exceed 12 (twelve) months, however, a registrant may apply for an extension no exceeding 6 (six) months.

An issuer will be required to register each offering. This can either be for the purpose of a new ICO or NFT or if the allotted 12 month period plus the 6 month extension has elapsed. 

A person must be in Seychelles for a period of, or periods totalling in 183 days or more in a any 12 month period of a calendar year.

Every licensee shall employ, either directly or indirectly, a reasonably adequate number of suitably qualified persons to carry out the core income generating activities and incurs an adequate amount of operating expenditures for such activities. The licensee shall have at least one resident person as director on its board of directors, ensure that all records and documentation required to be kept by the licensee under this Act and regulations are available and accessible at the office, undertake complaint handling in Seychelles and hold at least 2 board of directors meeting and at least 4 management meeting in Seychelles.

No. An applicant has to indicate at application stage the manner in which records are to be kept. This can be done is hard copy or digitally. The key is accessibility in Seychelles. An applicant must ensure that considerations are had to allow for up to date records to be maintained and for those records to be accessible without delay.

A guidance note on the use of Cloud Storage Solutions is available for entities wishing to undertake their services for the purpose of record keeping.

A minimum of 7 years.

The Financial Consumer Protection Act, 2022 requires that a complaint handling unit be established, with the maintenance of the register of complaints, in Seychelles. If a licensee chooses to have an attached entity to undertake the handling of complaints, the personnel in Seychelles will remain liable for the function.

Yes. There is no obligation for a separate corporate structure. It is for the licensee/ applicant to determine. However, the applicant must put in place appropriate measure to segregate and distinguish the VASP activities from those under the Securities Act.

Yes, provided that they can demonstrate that they have capacity and meet the requirements under Virtual Asset Service Provider Fit and Proper Code.

Entities that are known to the Authority will not have to resubmit valid and up to date information or documents, if they intend to rely on it as part of the application process. However, an application must be accompanied by a declaration form indicating what documents or information are to be relied upon.

If, during the assessment stage, documents or information are found to be inaccurate or out of date, the application will be deemed incomplete, refused and the application fee forfeit.

An existing licensee will not have to resubmit the entire manual but rather may submit a supplementary document, containing the VASP or VA specific considerations or measures to be implemented.

If complete manuals are to be submitted, applicants must preface the document with page providing for the page number/ paragraph which relates to the VASP/ VA activities.

Existing reporting entities are required to not only undertake an IRA but must also regularly review it and update the information relied upon, when required. If an existing IRA does not specifically include assessment of the potential financial crime risks linked to VA products and VASP services, its IRA will not meet the VASP license application requirements. If an existing IRA does not include this information, it will need to be updated before being submitted with a VASP licence application.

Utilising the services of a third party licensed / regulated wallet service provider would not require that a VASP licence. However, if the entity is effecting trades, purchases or providing investment advice vis a vis funds or virtual assets on behalf of the client for whom they hold said funds or asset, they will fall within scope of the Act. 

A licensee under the Securities Act, may be required to demonstrate how they do not fall within any of the definitions provided for within Schedule 1 of the Act, in that they are not offering virtual asset related services.

If an entity licenced under the Securities Act, 2007 is accepting and holding client virtual asset it would be required to apply and hold a VASP licence.

Alternatively, where a Securities licensee is accepting payment for services rendered in cryptocurrency or such other virtual currency for which payment is effected into their personal wallet; no VASP licence will be required.

An entity licensed under the Securities Act and the VASP Act, will be required to adhere to the respective tax requirements under both laws.

No. Despite both licenses being held by the same company, it will be a requirement that the capital requirement measures are met through the maintenance of separate accounts.

IBCs holding a VASP licence will be required to make such annual returns as is required by the IBC Act and the Virtual Asset Service Providers Act, 2024.

A licensed VASP shall maintain a record of both its client and its own transactions at its principal place of business for a period of not less than 7 years beginning from the date the transaction occurred.

A licensee shall maintain adequate accounting and other records of both its client and its own transactions at its principal place of business for a period of not less than 7 years beginning from the date the transaction occurred.

IBCs operating as VASPs are to be aware that by virtue of being a Virtual Asset Service Provider is a reporting entity under the AML/CFT Act and is therefore required to adhere to the record keeping requirement prescribed therein.

A licensee must have in place at a minimum professional indemnity insurance and such other insurance policy in line with the risks and levels of protections required.

At application stage a quote will suffice but the applicant may be required to explain as to why the chosen policy is sufficient and commiserate with their business offering.

However, if where a licensee has exhausted all means for obtaining the necessary insurance coverage, it may apply to the authority for approval and proposed an alternative form of protection which addresses the risks and scale of the proposed business.

There is no requirement for the insurance policy to be sourced from the Seychelles. However, if choosing to obtain insurance coverage from a foreign jurisdiction approval must first be obtained from the Insurance Supervision Section of the FSA by way of completing the attached form [to include the link to application form]

Once a VASP is licensed under the VASP Act, they shall be a reporting entity under the AML/CFT Act as per the consequential amendments. As such, the licensed VASPs will be required to comply with the provisions of the AML/CFT Act and the AML/CFT Regulations.

Amendments to the AML/CFT Act include the obligation on the VASPs to collect certain personal identifier information and the exchange of that information, otherwise referred to as the “Travel Rule” requirements.

Seychelles’ Travel Rule requirements are commensurate with the requirements described in the Financial Action Task Force (FATF) Recommendation 15 and was drafted taking account of the financial crime risks and tactics used by illicit actors, analysed and assessed as part of the 2022 NRA and ONRA refresh. Seychelles’ Travel Rule requirements are, therefore, aligned to international standards and assessed risks, as opposed to replicating similar requirements adopted in other jurisdictions.

Licensed VASPs are not allowed, under any circumstances, to apply simplified due diligence measures.

A licensed VASP shall maintain records of -

(a)        customer due diligence measures, including account files, business correspondence and copies of all documents evidencing the identities of customers and beneficial owners, and records and the results of any analysis undertaken in accordance with the provisions of this Act.

(b)        all transactions carried out both domestically and internationally by it and correspondence relating to the transactions as is necessary to enable any transaction to be readily reconstructed at any time by the FIU or the Attorney-General, and the records shall contain particulars sufficient to identify —

(i)         the nature and date of the transaction.

(ii)        the type and amount of currency involved.

(iii)       the type and identifying number of any account with the reporting entity involved in the transaction.

(iv)       if the transaction involves a negotiable instrument other than currency, the name of the drawer of the instrument, the name of the institution on which it was drawn, the name of the payee (if any), the amount and date of the instrument, the number (if any) of the instrument and details of any endorsements appearing on the instrument.

(v)        the name and address of the reporting entity, and of the officer, employee or agent of the reporting entity who prepared the record.

(c)        all reports made to the FIU under section 48; and

(d)        enquiries relating to money laundering and terrorist financing activities, made to it by the FIU.

The records mentioned above shall be kept for a period of 30 years in digital form, from the date on which the business relationship ceases, by the licensed VASPs.

The Travel Rule which must be complied with by VASP operating in or from the Seychelles will be expected, both when applying for authorization, and throughout the period in which they conduct authorised VASP activities, to evidence the incorporation of these requirements into their procedures, how it verifies that they are being applied and testing measures used to ensure these controls are and remain appropriate and effective.

Financial Action Task Force (“FATF”) Recommendation 16 prescribes that originating VASPs must obtain and hold required and accurate originator information and required beneficiary information on virtual asset transfers. These requirements apply to VASPs whenever their transactions (in fiat currency or virtual assets) involve:

1. a traditional wire transfer
2. a virtual asset transfer between a VASP and another obliged entity, or
3. a virtual asset transfer between a VASP and a non-obliged entity

Existing reporting entities applying for a VASP licence, who are currently exempted by the Authority, will have to appoint an Alternate Compliance Officer irrespective of the number of staff members.

New applicants applying for a VASP licence shall appoint both a Compliance Officer and an Alternate Compliance Officer.

Applicants will be responsible for assessing the fitness and propriety of individuals they seek to nominate to act as Compliance Officer under the AML/CFT Act. Candidates will be required to meet the fitness and propriety requirements specified under both the AML/CFT Act and the AML/CFT Regulations.

As part of this assessment, applicants shall ensure that the proposed individuals for fulfilling the role of compliance officer and alternative compliance officer meets with all the requirements as provided in section 34 (2) of the AML/CFT Act, Regulation 11 and the specific requirements of Part 3 (a) of the First Schedule to the AML/CFT Regulations.

Applicants will be expected to have in place procedures and controls to ensure that suspicious activity is reported in compliance with Seychelles’ AML/CFT legislation.

The Authority may require that, as part of the authorization process, applicants demonstrate how they intend to implement these requirements, including providing an on-screen demonstration of their STR reporting process.

VASPs operating in or from the Seychelles shall comply with the provisions of the Prevention of Terrorism (Implementation of UNSCR on Suppression of Terrorism) Regulations.  As such, VASPs will be expected when applying for authorization and throughout the period in which it operates in or from the Seychelles, to evidence it has appropriate and effective controls to mitigate sanctions risks. This includes the identification of designated individuals and entities by the United Nations Security Council and individuals or entities who may be engaging in or assisting others to circumvent sanctions restrictions.

The Authority's remit concerning sanctions relates to ensuring that reporting entities, including VASPs, have in place as part of their financial crime prevention programmes, appropriate and effective system for the mitigation of sanction risk and compliance with the provisions of the the Prevention of Terrorism (Implementation of UNSCR on Suppression of Terrorism) Regulations.

VASPs will need to also demonstrate their procedures include a process for the identification of designated individuals and entities and the systems which they apply for name and transfer screening. Further information regarding Seychelles’ sanction reporting requirements can be found on the FIU website: https://seychellesfiu.sc.