Seychelles is seeing an increase in complaints about activities involving cryptocurrencies, according to a national risk assessment done by the Financial Services Authority (FSA). Ali Hassan, the chief executive of FSA, explained that the financial sector has experienced a transformation in recent years, with cryptocurrencies becoming a popular method of payment. He noted that while certain international business companies and Seychellois businesses are engaging in cryptocurrency activities, cryptocurrency is not recognized as legal tender by Seychelles' Central Bank. Any individuals who trade in it are doing so at their own risk.
The FSA has received complaints from investors who have lost their money or investments through cryptocurrencies. In 2018, there were 28 complaints registered, with five related to cryptocurrency activities. In 2019, there were 27 complaints, and nine were related to cryptocurrency. In 2020, 12 cases were recorded with eight for cryptocurrency, and in 2021, 27 cases were recorded, with 23 for cryptocurrency. The increase in complaints shows that more Seychellois and businesses are interested in engaging in cryptocurrency activities.
Hassan said that local and international bodies, such as the Financial Intelligence Unit (FIU) and the police force's unit that investigates financial crimes (FCIU), are making requests for information on companies registered in Seychelles that are conducting illegal activities through cryptocurrency. Between January 1, 2019, and March 31, 2021, FIU recorded 187 requests for information on companies, while FCIU recorded 44 requests for assistance with investigations of companies.
In response to these concerns, the government, through FSA, conducted a national risk assessment on virtual assets and businesses that offer services using virtual assets to understand the current state and associated risks. The exercise was done in the first six months of 2022 with the assistance of an expert recommended by the World Bank. Since there is currently no framework, there is no legal protection for investors or individuals using virtual assets.
The objectives of the national framework are to put in place legal provisions to register businesses engaging in virtual asset activities as soon as possible and make license provisions based on the types of activities allowed in Seychelles. The national framework aims to address concerns and provide legal protection for investors and users of virtual assets in Seychelles.
Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.