The Seychelles National Assembly has approved a bill aimed at regulating Virtual Asset Service Providers (VASPs). Minister of Finance Naadir Hassan presented the bill, which is part of Seychelles’ broader strategy to address risks associated with virtual assets and VASPs.

Once the law is passed, VASPs applying for a license will be required to establish a substantial presence in Seychelles. This includes appointing a resident director and setting up an office with competent staff. The law is designed to ensure that VASPs operate responsibly and to prevent the misuse of virtual assets for illegal activities.

Persons who are not eligible for a license

Hassan noted that entities seeking a license must incorporate under the Companies Act or the International Business Companies Act. He stressed that individuals are not eligible for licenses. Entities that are already regulated by the Central Bank of Seychelles must obtain approval from the bank before they can operate as VASPs.

The new law applies to wallet service providers, virtual asset exchanges, brokers and virtual asset investment providers. All of these entities must undergo a thorough evaluation process before being granted a license.

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— Daily Dose Media (@_DailyDoseMedia) August 20, 2024

FSA provides consumer information

The finance minister stressed that the legislation seeks to strike a balance between supporting innovation in the virtual asset space and addressing money laundering concerns. The bill is aligned with recommendations from the Financial Action Task Force (FATF), a global standard setter in the fight against money laundering and terrorist financing.

The Seychelles Financial Services Authority will be tasked with enforcing the new regulations. The law also includes provisions for consumer education, with a focus on raising awareness of potential scams and the risks of improper use of virtual assets.

This article was written by Tareq Sikder on www.financemagnates.com.