Seychelles National Assembly approves bill to regulate virtual asset service providers

The Seychelles National Assembly has unanimously approved a bill aimed at regulating virtual asset service providers (VASPs) within the country. Introduced by Finance Minister Naadir Hassan, this legislation is part of Seychelles' broader strategy to mitigate the risks associated with virtual assets and ensure that VASPs operate responsibly and securely.

The new law aligns with the Financial Action Task Force (FATF) recommendations, balancing innovation in the virtual asset sector with the prevention of money laundering and other illicit activities. 

To qualify for a license, VASPs must demonstrate a substantial presence in Seychelles, including having a resident director, a local office with competent staff, and accessible operational records.

Individuals are not eligible for licenses; only entities incorporated under the Seychelles Companies Act or the International Business Companies Act can apply. Entities already regulated by the Seychelles central bank must obtain approval from the bank to operate as VASPs.

The Seychelles Financial Services Authority (FSA) will implement and enforce these regulations, and also educate consumers and VASPs about potential risks, including scams and illicit activities. This educational component is crucial for fostering a safer environment for virtual assets.

The approval marks a significant step in integrating virtual assets into Seychelles' financial system while maintaining strict oversight. By introducing this framework, Seychelles aims to balance technological innovation with financial crime prevention, positioning itself as a proactive regulator in digital finance. This move reinforces Seychelles' commitment to safeguarding its financial system while supporting technological advancement.