The Seychelles Ministry of Finance has announced the initiation of a regulatory framework for the cryptocurrency industry in order to protect users from risks.
During a meeting of the National Assembly, Finance Minister Naadir Hassan explained that the government is developing requirements for the registration and licensing of companies dealing with digital assets.
Hassan observed that the global financial sector has changed dramatically over the past five to seven years, with companies seeking to introduce new payment methods, including digital assets.
Many international companies that work with cryptocurrencies are registered in the Seychelles, but crypto assets can be used to finance illegal activities and money laundering, he said.
The decision to develop crypto regulation followed a public risk assessment by the Seychelles Financial Services Authority (FSA).
The FSA report indicated that the number of complaints related to cryptocurrencies has increased significantly in the Seychelles.
For instance, in 2018, there were 28 registered complaints, five of which were related to cryptocurrency activities.
In 2019, out of 27 complaints, nine were related to cryptocurrencies. In 2020, eight complaints were registered, while in 2021, 23 complaints related to digital assets were filed.
The Seychelles regulators began assessing the risks of the cryptocurrency industry in September 2021.
The local authorities did not have a clear position at that time: whether to ban cryptocurrencies or adapt legislation to regulate them.
However, as the local population is increasingly interested in investing in digital assets, the need for industry regulation has become apparent.
This will ensure that local investors and people using cryptocurrency products have legal protection of their interests.