The Seychelles Financial Services Authority (FSA) is reportedly working with the country’s Treasury Department on a policy to either ban or license crypto trading platforms as registered international companies.

Increase in international investigations of crypto platforms

According to a report, the FSA’s move comes against the background of an increasing number of international investigations into fraudulent crypto trading platforms that have been traced back to the island nation. As recently reported by News, the Onecoin bitcoin scam became the latest foreign crypto company to be the target of such an investigation. This after a request for an investigation was submitted to the country’s law enforcement authorities.

Meanwhile, Randolf Samson, who heads the FSA’s money laundering and terrorist financing division, is quoted in the same report explaining the rationale for the regulator’s move. Samson detailed:

There are many public companies that make this activity easier. The reason they use Seychelles is because we don’t have a framework that would otherwise discourage them. The cryptocurrency has developed quite quickly, but the laws of many countries are not up to date with this type of activity.

Still, Samson insists that “a risk assessment must be conducted to assess the pros and cons” before making a final decision. So if the result of the so-called risk assessment suggests potential benefits for the Seychelles, such trading companies will be licensed, explained Samson.

On the other hand, if incorporation or licensing of cryptocurrency trading platforms “brings too many risks and a bad reputation, we will simply ban the activity”.

The growing popularity of crypto

Still, Samson admits that a decision leading to a ban on crypto trading in Seychelles could prove unpopular. Samson said:

“The problem with cryptocurrency, the way things are going, you need to take a stance as it is popular with a growing number of people and other countries are taking options to regulate this activity.”

However, if the Crypto Trading Company Licensing Policy is passed, Seychelles will be forced to take responsibility for ensuring that individuals and businesses are not involved in illegal activities. In any event, such a policy will “also bring Seychelles into line with the latest changes made by the Financial Action Task Force (FATF) in June 2020,” the report said.

Should Seychelles license non-island based crypto trading platforms? Let us know what you think in the comments section below.

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