The Seychelles Virtual Asset Service Providers Bill 2024 is set to go live in a bid to regulate virtual asset service providers (VASPs) as part of the Financial Action Task Force's (FATF’s) crackdown on multiple jurisdictions in this area of the financial services world.
Appleby Global lawyers said in a briefing note on 16 July that the islands' new rules set "a robust legislative framework designed to regulate virtual asset service providers (VASPs) and mitigate potential financial crimes such as money laundering and terrorist financing".
The briefing commented: "The Virtual Asset Service Providers Bill, 2024, marks a significant milestone in Seychelles’ journey towards a secure, transparent, and innovation-friendly virtual asset ecosystem. By introducing comprehensive regulatory measures, the VASP Bill not only addresses current financial crime risks but also lays the foundation for sustainable growth and consumer confidence in the burgeoning field of virtual assets.
"As we move forward, Seychelles remains committed to fostering an environment that balances technological innovation with robust regulatory oversight, ensuring the country remains at the forefront of global financial leadership."
When the VASP Bill comes into force, all persons providing virtual asset services (VASPs) must make an application to the FSA under the VASP Bill, by 31 December 2024, to be issued with a licence or authorised as a registrant promoter of virtual assets in accordance with the terms of the VASP regulations.
In the meantime, a person may continue to carry out its business activities until its application for a licence is granted or refused or a registrant is authorised to issue an initial coin offering or a non-fungible token and such decision shall be communicated in writing to the applicant by the FSA.
The VASP Bill mandates a licensing system for specific virtual asset products and services including wallet providers, exchanges, broking, and investment providers. This ensures that only authorized entities can operate as VASPs in or from Seychelles, providing a safeguard against unauthorised activities, the lawyers said.
