Seychelles passes groundbreaking cryptocurrency legislation to control the virtual assets industry
Seychelles Tightens Crypto Oversight with New Virtual Assets Bill
Seychelles has taken a significant step in regulating the digital asset industry with the approval of a new Virtual Assets Bill by the National Assembly. The legislation is a response to rising consumer complaints about crypto-related losses in Seychelles and aims to create a comprehensive legal framework for the digital asset industry within the country.
Under the new framework, Virtual Asset Service Providers (VASPs) will be required to set up a company under either the Seychelles Companies Act or the International Business Companies Act. The Financial Services Authority (FSA) has been designated as the regulator responsible for implementing and enforcing the Virtual Assets Bill.
The bill emphasizes AML/CFT compliance, requiring VASPs to appoint compliance officers responsible for robust Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) systems. This regulatory clarity and operational flexibility have attracted various crypto and online trading firms, positioning Seychelles as an emerging hub for virtual asset services.
Applicants must demonstrate a "substantial presence" in Seychelles, including having a resident director and an adequately staffed office. The details of the Virtual Assets Bill have not been fully disclosed at this time.
South Africa Aligns with FATF Recommendations
South Africa follows the Financial Action Task Force’s (FATF) updated norms closely, integrating these into its broader financial regulatory regime to combat money laundering and terrorism financing risks associated with virtual assets. While exact recent legislative changes are less detailed in the search results, South Africa has been recognized for aligning its FinTech and virtual asset regulatory environment with FATF recommendations and ongoing developments seek to tighten oversight consistent with international standards.
Nigeria's Regulatory Landscape Evolves
Nigeria has a complex stance towards crypto regulation, with the central bank imposing bans and restrictions on crypto trading but also advancing regulatory frameworks to control virtual assets, reflecting FATF guidance. The country continues developing compliance expectations balancing innovation and anti-money laundering objectives, though specific recent legislative or regulatory updates were not found in the results provided.
The new legislation in Seychelles mirrors a broader effort across Africa to comply with global standards set by the FATF. Seychelles' efforts to tighten crypto oversight follow a report indicating that 97% of African countries struggle to comply with the Financial Action Task Force's (FATF) Recommendation 15 (R 15) on crypto assets.
The Seychelles National Assembly's approval of the Virtual Assets Bill was over a year after Minister Hassan first revealed the development of a national digital asset policy. The bill's details have not been fully disclosed, but key VASP activities that will require licensing include virtual asset exchanges, brokerage, investment services, and wallet providers.
The status of virtual asset regulation in Seychelles, South Africa, and Nigeria shows active adaptation to FATF recommendations, with Seychelles recently updating its VASP framework through a 2024 bill emphasizing AML/CFT compliance. Nigeria is still in the process of determining its regulatory framework for crypto, with the new Securities and Exchange Commission (SEC) chief looking to make progress in this area. South Africa currently has the most advanced crypto regulation on the African continent, having granted 138 crypto licenses as of June 2024.
References: 1. Seychelles News Agency 2. BusinessTech 3. Cointelegraph 4. CoinDesk 5. Financial Services Authority of Seychelles
- The approval of Seychelles' Virtual Assets Bill by the National Assembly marks a significant step in regulating the digital asset industry within the country's business sphere.
- The Financial Services Authority (FSA) has been designated as the regulator responsible for implementing and enforcing the Virtual Assets Bill, aiming to create a comprehensive legal framework for digital assets in Seychelles.
- Under the new framework, Virtual Asset Service Providers (VASPs) will be required to set up a company under either the Seychelles Companies Act or the International Business Companies Act.
- Applicants must demonstrate a "substantial presence" in Seychelles, including having a resident director and an adequately staffed office, as part of the regulatory requirements.
- South Africa, aligned with FATF recommendations, is integrating these into its broader financial regulatory regime to combat money laundering and terrorism financing risks associated with virtual assets.
- Nigeria continues to develop its regulatory framework for crypto, balancing innovation and anti-money laundering objectives, reflecting FATF guidance.
- The status of virtual asset regulation in Seychelles, South Africa, and Nigeria reveals active adaptation to FATF recommendations, with Seychelles recently updating its VASP framework through a 2024 bill emphasizing AML/CFT compliance, positioning South Africa as the continent's leader with 138 crypto licenses granted as of June 2024.
