Seychelles Cabinet Greenlights Proposed Virtual Assets Law for Parliamentary Consideration

The Cabinet of Ministers in Seychelles recently granted approval to a new virtual assets law, and the Vice President, Ahmed Afif, announced that it will be presented to the National Assembly. Afif highlighted the intent of the proposed regulatory framework for virtual assets (VA) and virtual assets services providers (VASP) to encourage innovation and facilitate responsible and sustainable growth within the virtual assets industry. The process to establish the law commenced earlier in the month with consultations conducted by the National Anti-Money Laundering and Countering the Financing of Terrorism Committee (NAC), expected to complete the regulations by the end of February.

The Vice President emphasized that the regulatory framework aims to address and safeguard against potential financial crime risks associated with the misuse of virtual assets products and services provided within or from Seychelles. Noteworthy regulations include a requirement for enterprises dealing with virtual assets to maintain physical offices in Seychelles. Afif pointed out that once the regulation is enforced, entities cannot claim to operate from Seychelles without obtaining a license from the country.

Additionally, the NAC is ensuring that the regulation aligns with the requirements of the Financial Action Task Force (FATF) Recommendation 15, which pertains to new technologies. The finalization of the law is anticipated by the end of February, and it will be submitted for a re-rating request for recommendation by March 15. The re-rating will be reviewed by the Eastern and Southern African Anti-Money Laundering and Countering the Financing of Terrorism (ESAAMLG) Task Force in September 2024.

The Financial Services Authority (FSA) in Seychelles has identified approximately 80 companies or entities that may fall within the VA and VASP category. The FSA expects these entities to apply for a license under the new law once it is implemented.