The Seychelles National Assembly has approved a draft bill aimed at regulating virtual asset service providers (VASPs). Finance Minister Naadir Hassan presented the bill, which is part of Seychelles' broader strategy to address risks associated with virtual assets and VASPs.

Once enacted, the law will require VASPs seeking a license to establish a substantial presence in Seychelles. This includes appointing a resident director and setting up an office staffed with competent personnel. The law is designed to ensure that VASPs operate responsibly and to prevent the misuse of virtual assets for illicit activities.

Individuals Ineligible for Licenses

Hassan noted that entities applying for a license must incorporate under either the Companies Act or the International Business Companies Act. He emphasized that individuals will not be eligible for licenses. Entities already regulated by the Seychelles central bank will need to seek approval from the bank before operating as VASPs.

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

🌴 Seychelles takes a progressive step with the approval of the Virtual Asset Regulation Bill! 🚀 This move will foster a secure environment for virtual assets in the country. #Seychelles #VirtualAssetRegulation #Blockchain #Crypto #DigitalAssets #Fintec… https://t.co/3TfqOe1dsa

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

FSA Handles Consumer Education

The finance minister highlighted that the legislation aims to strike a balance between supporting innovation in the virtual asset space and addressing money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term 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 terrorism financing.

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