Seychelles' Financial Services Authority cautions consumers about unregulated virtual asset service providers

VASPs are businesses that facilitate the exchange of virtual assets, including cryptocurrencies like Bitcoin, non-fungible tokens, or utility tokens like Filecoin. (QuoteInspector.com/Flickr) Photo License: CC BY-ND 2.0

Consumers dealing with virtual assets or virtual asset service providers not registered nor authorised under any law, especially Seychelles laws, are advised to remain cautious about the risks and potential financial loss and damage that can be incurred.  

The Financial Services Authority (FSA) and the Registrar of Companies (ROC)  issued the caution in a joint press communique and said that this follows a review being undertaken on virtual asset (VA) and virtual asset service providers (VASP) businesses claiming to be regulated in Seychelles.

VASPs are businesses that facilitate the exchange of virtual assets and this includes cryptocurrencies like Bitcoin, non-fungible tokens, or utility tokens like Filecoin.

The communique included an annex with a list of around 50 businesses that are not registered or incorporated in Seychelles, an archipelago in the western Indian Ocean.

According to the communique, several of these entities have also been found to be advertising and/or offering virtual asset service provider activities and targeting Seychelles' consumers with websites in the local language promoting the sale or exchange of cryptocurrencies or other virtual assets.

They are also holding promotional events, providing payment options that support the purchase of virtual assets using credit cards and, debit cards with conversions within the local currency, and claiming to operate from or have their registered business address in the Seychelles.

"These businesses are not applying the controls required under the Seychelles Anti-Money Laundering and Countering the Financing of Terrorism law, intended to detect, prevent and disrupt possible financial crimes. Furthermore, these entities do not have in place control measures to protect customer funds and reduce the risk of their misuse," said the communique.

The FSA and the ROC are requesting any person who has a reasonable belief that any business or individual is claiming or holding itself out to be regulated or affiliated in any way with Seychelles, for the purpose of operating or offering any VASP or VA-related activities, to contact the FSA on vasp.enquiries@fsaseychelles.sc .

Currently, Seychelles does not have a licensing regime for VASPs and this is not in accordance with recommendation 15 of the Financial Action Task Force (FATF) Standards.

The FSA and ROC said that the island nation is working on a legislative framework to regulate VASPs and VAs that is expected to be finalised by early 2024.

In the meantime, the FSA and the ROC,  in collaboration with other law enforcement agencies, are undertaking close monitoring so as to prevent and detect any illegal and unauthorised activities so as to protect the interests of the consumers and the reputation of Seychelles.