Crypto regulation in Seychelles
The legal regime for regulation of cryptocurrencies is still underdeveloped in Seychelles and ICOs are not specifically regulated. Despite the ICO not being defined as a ‘security business’ as per its definition under the Securities Act, a facts and circumstances analysis of digital assets, if permitted to be traded online with a Seychelles resident may bring ICOs within the regulatory sphere of the Securities Act. [1]
Thus, cryptocurrency is not treated as a currency and therefore it’s not a form of payment offered by financial institutions licensed or regulated by the Central Bank of Seychelles. However, there’s an increasing popularity of virtual currencies and assets on the international arena, as well as the developing interest on the domestic front and the associated risks and the impact of such activities locally.
Source: Freeman Law
The legal regime for regulation of cryptocurrencies is still underdeveloped in Seychelles and ICOs are not specifically regulated. However, although an ICO is not defined as a ‘security business’ as per its definition under the Securities Act, a facts and circumstances analysis of digital assets (such as bitcoin, ethereum, etc), if permitted to be traded online with a Seychelles resident may bring ICOs within the regulatory sphere of the Securities Act.
Source: Apple By Global
There is no separate legislative or regulatory frame work with respect to virtual assets in Seychelles.
The primary legislation which governs securities and investment products in Seychelles is the Securities Act, 2007 (Securities Act). The Securities Act provides for licensing and regulation of securities dealers, investment advisers and securities exchange and the responsible body for the same is the Financial Services Authority (FSA). The Securities Act specifically lists the financial products that are considered securities under the Act and does not include virtual assets/ cryptocurrencies under the list. However, whether an asset/product would be considered as a security under the Securities Act would be determined by the features of the asset.
Source: Apple By Global
There are no regulations for crypto-to-crypto exchanges in Seychelles. While there are no existing regulations for to crypto-to-fiat exchanges in Seychelles, it would be preferable to obtain the opinion of the Central Bank of Seychelles with respect to such an exchange.
Source: Apple By Global
The legal regime for regulation of cryptocurrencies is still underdeveloped in Seychelles and ICOs are not specifically regulated. Despite the ICO not being defined as a ‘security business’ as per its definition under the Securities Act, a facts and circumstances analysis of digital assets, if permitted to be traded online with a Seychelles resident may bring ICOs within the regulatory sphere of the Securities Act. [1]Thus, cryptocurrency is not treated as a currency and therefore it’s not a form of payment offered by financial institutions licensed or regulated by the Central Bank of Seychelles. However, there’s an increasing popularity of virtual currencies and assets on the international arena, as well as the developing interest on the domestic front and the associated risks and the impact of such activities locally.
Source: Freeman Law
The legal regime for regulation of cryptocurrencies is still underdeveloped in Seychelles and ICOs are not specifically regulated. Despite the ICO not being defined as a ‘security business’ as per its definition under the Securities Act, a facts and circumstances analysis of digital assets, if permitted to be traded online with a Seychelles resident may bring ICOs within the regulatory sphere of the Securities Act. [1]
Thus, cryptocurrency is not treated as a currency and therefore it’s not a form of payment offered by financial institutions licensed or regulated by the Central Bank of Seychelles. However, there’s an increasing popularity of virtual currencies and assets on the international arena, as well as the developing interest on the domestic front and the associated risks and the impact of such activities locally.
Source: Freeman Law
At the moment, Seychelles does not have a specific legislation targeting the issuance of cryptocurrency licenses, however, with the increasing interest of entrepreneurs here to create fintech companies, including cryptocurrency exchanges, the government has adopted the National Payment System Vision and Strategy which aims at the improvement of the payment structure in Seychelles and the first steps to be taken in order for a cryptocurrency licensing regulatory regime to be put in place.
The current laws which target cryptocurrency businesses, and which allow the trading of digital coins online by resident companies are:
- The International Trade Zone Act and the International Trade Zone Regulations which allow the enabling of international free zone in which such companies can operate;
- The Companies Law which provides for the creation of a domestic company under which a cryptocurrency license can be obtained;
- The Companies Special License Act which provides for special license companies to trade virtual money online;
- The Anti Money Laundering Law and Regulations which apply to fintech companies in Seychelles;
- The Electronic Transactions Act which regulates electronic signatures which can be used in online transactions and payments.
In order to trade through cryptocurrency exchanges, a Seychelles cryptocurrency license can be obtained under the form of a Forex license under the provisions of the Securities Act.Our agents can help you register any type of company with the purpose of obtaining a cryptocurrency license, including an offshore company in Seychelles.
Source: Seychelles News Agency
Seychelles’ finance ministry and capital market regulator are now working on a crypto-policy framework, according to local reports. The island nation is on its way to either prohibit or license crypto-trading platforms as registered international businesses.
The development comes on the back of several trading scams, along with the ongoing investigation into the $10-billion OneCoin scam. The country’s financial crime investigation unit is probing the transfer of 230,000 Bitcoins since the parent company was registered in Seychelles.
Source: AMB Crypto
The Anti Money Laundering and Countering the Financing of Terrorism Act, 2020 (AML Act) provides for the AML regime in Seychelles and its main principle is that reporting entities should follow and apply the provisions of the law which reflect the Financial Action Task Force’s (FATF) international standards to prevent detect and combat money laundering and terrorist financing. The AML Act defines a “reporting entity” as those persons that carry out certain businesses and activities and include banks (including offshore banks), bureau de change, insurance companies, money transfer companies, securities companies, corporate service providers, etc.
As per the definition of a reporting entity under the AML Act, a Seychelles international business company carrying out the business of dealing in virtual assets would not be considered as a reporting entity. However, we recommend a cautious approach as far as anti money laundering legislation is concerned and in our view companies incorporated in Seychelles must take appropriate measures to maintain the customer identification and record-keeping procedures and follow the anti-money laundering and counterterrorist financing obligations under the AML Act.
The Anti Money Laundering and Countering the Financing of Terrorism Act, 2020 defines virtual assets as ” a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes and does not include digital representation of fiat currencies, securities and other financial assets.”
Source: Mondaq
The Financial Services Authority (Regulatory Sandbox Exemption) Regulations, 2019 (Regulations) were introduced to the Seychelles business landscape by the Minister for Finance, Trade, Investment and Economic Planning under the purview of the Financial Services Authority (Authority), the regulator for non-bank financial services.
As per the Regulations, the regulatory sandbox (Sandbox) allows for small-scale testing of innovative eligible financial services or products within a regulated environment with defined conditions and restrictions, and may obtain exemptions from licensing, disclosure and reporting requirements under the Securities Act, 2007 (Act). As interest continues to grow in virtual currencies and blockchain technology, governments, regulatory authorities and standard setting bodies are evaluating the benefits and potential risks of these innovations while considering numerous regulatory issues. Sandbox announcements by the Authority go some way toward clarifying its position relative to a digital asset’s possible designation and exemption as a security, the obligations of issuers and intermediaries, and the responsibilities required of trading platforms.
Source: IFC Review
The Financial Services Authority (FSA) in Seychelles recently launched a regulatory Sandbox, fostering innovation across a broad range of digital assets and services, and enabling regulatory solutions for security token offerings under the current Securities Act.
The Sandbox is part of the Global Financial Innovation Network (GFIN); a cross-border regulatory sandbox for firms testing innovative financial products, services or business models across multiple jurisdictions; which was initially launched by the UK Financial Conduct Authority (FCA). It provides a regulated environment for companies registered in Seychelles to carry out FinTech-related financial services within the securities industry.
The Central Bank of Seychelles (CBS), furthermore, has identified that Financial Technologies (FinTech) can enhance the evolution of the financial sector, especially in areas identified in the Financial Sector Development Plan for both the onshore and offshore financial sectors. The CBS is leading efforts to formulate a National FinTech Strategy for Seychelles, in collaboration with the Ministry of Finance, Trade, Investment, and Economic Planning and the Financial Services Authority.
Source: Finextra