Introduction to Virtual Assets Service Providers Regulatory Framework in the Seychelles.
Background
Stemming from the Financial Action Task Forces (“FATF”) amendment to recommendation 15, dealing with New Technologies, the National Anti Money Laundering Committee (“NAC”) commenced an exercise to put in place measures for the effective regulating of Virtual Asset Service Providers (“VASPs”) with the Financial Services Authority (“FSA”) as the primary authority for the purpose of authorisation and supervision.
This exercise commenced in 2021 with the undertaking of the National Risk Assessment, with the report published in 2022. Subsequently, in 2023 the Seychelles refreshed the data and will subsequently publish an updated report in 2024.
Scope of the Law
The FSA will be regulating services pertaining to virtual assets (“VA”) and not products. The 2022 NRA identified the most prevalent activities presently being undertaken in or from the Seychelles, as well as flagging the prevalent crimes more frequently associated by the activities.
The law therefore provides for an authorisation framework for:
- Wallet service providers
- Exchange service providers
- Virtual Asset broking
- Investment Providers
And the registration of ICO and NFTs.
Who Can Apply?
Eligible applicants are restricted to domestic companies and International Business Companies. Individuals are not eligible for licensing. A limitation has been placed on entities which hold a licence under the Financial Institution Act, 2004 -to apply for approval from the Central Bank of Seychelles, prior to submitting an application.