The Seychelles Financial Services Authority (FSA), along with the country's finance ministry, is reportedly working on a policy to ban or authorize cryptocurrency trading platforms as registered international firms.

Increase in international investigations on crypto platforms

According to a report, the FSA's move comes against the backdrop of a growing number of international investigations into scam cryptocurrency trading platforms that have been traced to the island nation. As recently reported, the Onecoin bitcoin scam has become the latest foreign crypto entity to be the subject of such an investigation. This is after an investigation request was submitted to the country's law enforcement agencies.

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Meanwhile, in the same report, Randolf Samson, who heads the anti-money laundering and terrorist financing section of the FSA, is cited explaining the rationale behind the regulator's move. He said: “There are many incorporated companies that are facilitating that business. The reason they are using the Seychelles is because we don't have a framework that would otherwise discourage them. The cryptocurrency has developed quite fast but the laws of many countries are not up to date with this type of activity ”.

However, Samson insists that "a risk assessment must be carried out to examine the pros and cons" before making any final decisions. Therefore, if the outcome of the so-called risk assessment indicates potential benefits for Seychelles, then such trading companies will be licensed, Samson explained.

On the other hand, if the incorporation or licensing of cryptocurrency trading platforms "brings too much risk and bad reputation, we will simply ban the activity".

The growing popularity of cryptocurrencies

However, Samson admits that a decision involving a ban on cryptocurrency trading in the Seychelles could prove unpopular. He added: "The problem with cryptocurrency, the way things are going, you will have to take a stand as it is popular with a growing number of people and other countries are taking options to regulate this business."

However, if the policy of licensing cryptocurrency trading activities is adopted, Seychelles will be forced to take responsibility for ensuring that individuals and companies are not involved in illegal activities. In any case, such a policy "will also put the Seychelles in line with the recent amendments of the Financial Action Task Force (FATF) made in June 2020", concludes the report.

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