Seychelles’ Cabinet Approves New Virtual Assets Law for Parliament Submission

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Seychelles’ Cabinet of Ministers recently greenlit a new virtual assets law, slated to be presented to the National Assembly, as announced by Vice President Ahmed Afif during a press briefing last week.

Afif highlighted that with the Cabinet’s endorsement, the proposed law will swiftly move to the National Assembly for deliberation upon its reconvening. The primary objective of the regulatory framework for virtual assets (VA) and virtual assets services providers (VASP) is to foster innovation while ensuring responsible and sustainable growth in the virtual assets industry.

Efforts to formulate the law commenced earlier this month with consultations led by the National Anti-Money Laundering and Countering the Financing of Terrorism Committee (NAC). NAC is expected to finalize the regulations by the end of February.

The framework seeks to mitigate potential financial crime risks associated with the misuse of virtual assets products and services offered within or from Seychelles. One of the proposed regulations stipulates that enterprises dealing with virtual assets must maintain physical offices within the Seychelles archipelago.

Afif emphasized that adherence to these regulations is crucial, particularly in complying with the requirements of the Financial Action Task Force (FATF) Recommendation 15, which addresses new technologies.

The law, slated for finalization by the end of February, will undergo a re-rating request for recommendation by March 15, to be considered by the Eastern and Southern African Anti-Money Laundering and Countering the Financing of Terrorism (ESAAMLG) Task Force in September 2024.

Currently, the Financial Services Authority (FSA) in Seychelles has identified approximately 80 companies or entities that may fall under the VA and VASP category. FSA anticipates that these entities will be required to obtain a license under the new law once enacted.