The Seychelles National Assembly just approved a new bill which will regulating virtual asset service providers, or VASPs, setting the stage for tighter controls and oversight in the growing digital asset sector, in line with recommendations from the unelected organization, the Financial Action Task Force.
Virtual assets are risky, just like any other permissoned assets
The new bill is an important step in Seychelles’ strategy to mitigate the risks associated with virtual assets and the companies that provide related services.
Introduced by Finance Minister Naadir Hassan, the legislation wants to ensure that VASPs operate within a strict framework that prohibit the use of digital assets for illicit purposes.
Minister Hassan shared that the new law will require companies to be established under either the Companies Act or the International Business Companies Act, making sure they have a solid legal foundation within Seychelles Islands.
To qualify for a license, VASPs must demonstrate a real presence in the country, including having a local director, an office, staffed with competent workers, and it’s also required that all relevant records are accessible through this office.
They want to curb any potential for criminal activities through the use of premissioned virtual assets.
Innovation and money laundering
The law is supportive of innovation in the digital asset space, it also places pretty strict conditions on who can apply for a license.
Individual applicants will not be considered, and entities that fall under the regulation of the Seychelles central bank will require additional approval.
All prospective VASPs, including wallet service providers, crypto exchanges, brokers, and investment providers, must undergo an evaluation process before they can begin operations.
The finance minister made it clear that the goal of the legislation is to support the growth of the digital industry while simultaneously mitigating the evergreen risks of money laundering.
This aligns Seychelles with global standards set by the FATF, so the country can obey the international anti-money laundering suggestions.
Consumer protection, the driving force of almost every single bureaucratic intervention
The Seychelles Financial Services Authority, the FSA was tasked with enforcing the new regulations. For our safety, of course.
Beyond establishing a regulatory framework for VASPs, the bill also mentioned the need to educate both consumers and regulated entities about the potential dangers of scams and the misuse of virtual assets, as governments doesn’t want to anybody doing anyhing what governments doesn’t likes.
