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Seychelles National Assembly passes new virtual asset regulation bill

GrafaGrafa2024/08/20 10:20
By:Isaac Francis

The Seychelles National Assembly has passed a draft bill aimed at regulating virtual asset service providers (VASPs) within the country.

The legislation, introduced by Finance Minister Naadir Hassan, is part of Seychelles’ broader strategy to address the risks associated with virtual assets and to ensure that VASPs operate in a responsible and secure manner.

The bill is designed to align with the Financial Action Task Force (FATF) recommendations, focusing on both fostering innovation and preventing money laundering.

To qualify for a license under the new law, VASPs must demonstrate a substantial presence in Seychelles.

This includes having a resident director, establishing an office in the country, and ensuring that competent staff are available to manage operations.

The law also stipulates that all records must be accessible from the local office.

These measures are intended to ensure that VASPs are not only physically present in Seychelles but also fully accountable under the country's regulatory framework.

Individuals seeking licenses will not be eligible; only entities incorporated under the Seychelles Companies Act or the International Business Companies Act can apply.

Additionally, entities already regulated by the Seychelles central bank will require approval from the bank to operate as VASPs.

This is to ensure that only qualified and vetted entities can engage in virtual asset activities, further reducing the risk of misuse.

The bill outlines that the Seychelles Financial Services Authority (FSA) will be responsible for implementing and enforcing these regulations.

The FSA will also play a key role in educating consumers and VASPs about the potential risks associated with virtual assets, including scams and other illicit activities.

This educational component is crucial to ensuring that both service providers and users are aware of the legal and regulatory landscape, thereby fostering a safer environment for the use of virtual assets.

By introducing this regulatory framework, Seychelles aims to strike a balance between encouraging technological innovation and safeguarding against financial crimes.

The approval of this bill marks a significant step forward in the country's efforts to integrate virtual assets into its financial system while maintaining strict oversight and control.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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