Crystal Seychelles passes significant cryptocurrency legislation to govern digital asset industry
Seychelles Leads the Way in FATF-Compliant Virtual Asset Regulation in Africa
In a significant move towards financial transparency and compliance, the island nation of Seychelles has established a formal regulatory framework for virtual assets. As of 2025, virtual asset service providers (VASPs) operating in Seychelles are now required to be licensed and adhere to robust anti-money laundering (AML) and counter-terrorist financing (CTF) controls, under the Virtual Asset Service Providers (VASP) Act of 2024.
The Seychelles Financial Services Authority (FSA) oversees licensing, with strict submission of AML/CTF policies and ongoing compliance monitoring. This regulation aligns with the Financial Action Task Force (FATF) guidelines, emphasizing risk assessment and compliance without excessive operational burdens often seen in other jurisdictions.
The new Virtual Assets Bill, unanimously approved by the Seychelles National Assembly, aims to establish a comprehensive legal framework for regulating VASPs in the country. Applicants must demonstrate a "substantial presence" in Seychelles, including having a resident director and an adequately staffed office. VASPs operating in Seychelles will be required to set up a company under either the Seychelles Companies Act or the International Business Companies Act.
Minister Hassan acknowledged that the FATF's recommendation was factored into the Virtual Assets Bill. The Bill requires VASPs to implement controls such as customer due diligence, transaction monitoring, and reporting suspicious activities to the Financial Intelligence Unit (FIU). This places Seychelles in closer compliance with FATF standards than many emerging markets.
While Seychelles leads the way, other African countries are also making strides in virtual asset regulation. South Africa, for instance, has been actively working on virtual asset regulations, with the South African Reserve Bank (SARB) and Financial Sector Conduct Authority (FSCA) as key regulators. However, it's not specified if any other African countries have granted as many crypto licenses as South Africa.
Nigeria, on the other hand, has a complex regulatory stance. The Central Bank of Nigeria (CBN) has historically banned crypto transactions through banks, while the Securities and Exchange Commission (SEC) has moved towards regulating digital assets and requiring registration of crypto firms. Nigeria aims to align with FATF standards but has faced challenges balancing innovation with financial crime risks.
In comparison, Seychelles' regulatory approach offers a balance of compliance and business-friendly conditions, making it a favourable destination for VASPs. The Seychelles' efforts to tighten crypto oversight mirror a broader effort across Africa to comply with global standards set by the FATF.
| Jurisdiction | Current Virtual Asset Regulation Status | Alignment with FATF Standards | |--------------|----------------------------------------|-------------------------------| | Seychelles | Enforced VASP licensing since 2024, strict AML/CFT compliance, appointed compliance officers mandatory | Strong alignment with FATF AML/CFT guidelines, efficient licensing, supports innovation | | South Africa | Developing clearer regulation with SARB and FSCA, AML oversight active but licensing framework evolving | Intends to align with FATF, regulatory framework still maturing | | Nigeria | CBN imposed banking restrictions on crypto, SEC working on digital assets registration, regulatory ambiguity remains | Working towards FATF compliance but with implementation challenges and partial prohibitions |
As the world continues to embrace digital assets, Seychelles' proactive approach to regulation is setting a positive example for other African countries to follow.
- The Seychelles has established a formal regulatory framework for virtual assets that aligns with the Financial Action Task Force (FATF) guidelines.
- Virtual asset service providers (VASPs) operating in Seychelles are now required to be licensed and adhere to robust anti-money laundering (AML) and counter-terrorist financing (CTF) controls.
- The Seychelles Financial Services Authority (FSA) oversees licensing, with strict submission of AML/CTF policies and ongoing compliance monitoring.
- The new Virtual Assets Bill, unanimously approved by the Seychelles National Assembly, requires VASPs to implement controls such as customer due diligence, transaction monitoring, and reporting suspicious activities to the Financial Intelligence Unit (FIU).
- While Seychelles leads the way, other African countries like South Africa are also making strides in virtual asset regulation, with the South African Reserve Bank (SARB) and Financial Sector Conduct Authority (FSCA) as key regulators.
- In comparison, Seychelles' regulatory approach offers a balance of compliance and business-friendly conditions, making it a favorable destination for VASPs.
- As the world continues to embrace digital assets, Seychelles' proactive approach to regulation is setting a positive example for other African countries to follow, encouraging innovation and investment in the business, finance, and technology sectors.
