The Seychelles Financial Services Authority (FSA) has developed a new legislative framework for Virtual Asset Service Providers (VASPs), following a National Risk Assessment that identified significant financial crime risks associated with unregulated virtual asset activities.
Background
The framework aligns Seychelles with international standards, particularly FATF Recommendation 15 (on new technologies) and ESAAMLG requirements. This regulatory initiative aims to balance innovation with financial crime risk mitigation.
Key Framework Provisions
Licensing & Registration
Any company providing virtual asset services (wallets, exchanges, brokers, investment) in or from Seychelles must be licensed by the FSA. Promoters of ICOs and NFTs must also register.
Prohibited Activities
Substance & Governance
Financial Requirements
Minimum paid-up capital, reserves matching client liabilities, proper insurance, and financial reporting and audit obligations.
Cybersecurity & Controls
Formal policies, system controls, incident reporting, audits, business continuity plans, and senior management oversight.
AML/CFT Compliance
Timeline
September 2024
VASP Act comes into force
December 2024
Deadline for existing entities
Implications
Entities operating virtual asset businesses without licenses are conducting unauthorized activities. The FSA has full supervisory powers over VASPs, with other agencies (FIU, Central Bank, police) having defined roles under the amended laws.
Need Compliance Support?
Our compliance experts help licensed entities meet regulatory requirements and maintain good standing.