Seychelles Adopts Legislation to Regulate Virtual Asset Service Providers
The Seychelles National Assembly has successfully passed a bill aimed at regulating virtual asset service providers (VASPs) in the country. Under the new legislation, VASPs seeking licenses will be required to establish a physical presence in Seychelles, including the presence of a local director and an office with qualified staff. The primary objective of the law is to strike a balance between promoting innovation and combating money laundering, in line with the guidelines set by the Financial Action Task Force (FATF).
Taking Action Against Risks Associated with Virtual Assets
In a recent development, the Seychelles National Assembly greenlit a draft bill designed to govern the operations of virtual asset service providers (VASPs). According to reports, the legislation, presented by Finance Minister Naadir Hassan, serves as a crucial component of Seychelles’ strategy to address the risks associated with virtual assets and VASPs.
Once implemented, the bill will ensure responsible operations of VASPs and prevent malicious actors from exploiting virtual assets for illicit activities. As part of the licensing requirements, VASPs will be obligated to establish companies in Seychelles under either the Companies Act or the International Business Companies Act, as stated by Hassan prior to the bill’s approval.
Hassan reportedly commented, “To be eligible for a license, VASPs must demonstrate a significant presence in Seychelles, including having a resident director. They must maintain an office in Seychelles with qualified staff, and all necessary records must be accessible through that office.”
Striking a Balance Between Innovation and Money Laundering Concerns
However, individual applicants will not be considered, and entities already regulated by the Seychelles central bank will need to seek approval from the bank. Additionally, all applicants will undergo an evaluation process before being granted permission to operate as VASPs.
According to the finance minister, licenses will be required for wallet service providers, virtual asset exchanges, virtual exchanges, brokering services, and virtual asset investment providers. The proposed legislation strives to support innovation while effectively managing and mitigating the risks of money laundering, aligning with the recommendations of the Financial Action Task Force (FATF).
The implementation of the new law will be overseen by the Seychelles Financial Services Authority (FSA), which will also be responsible for creating a regulatory framework governing VASPs. The bill reportedly emphasizes the importance of educating consumers and regulated entities about scams and the improper use of virtual assets.