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VA Exchanges Dominate Mauritius’ Cryptocurrency Market
Mauritius, a small island nation off the coast of East Africa, has emerged as a major hub for virtual asset (VA) exchanges and related services. The country’s regulatory framework has attracted numerous entities offering VA exchange, broking, management, investment, and other related services.
VA Exchanges in Mauritius
According to industry experts, Mauritius is home to over 20 VA exchanges, including well-known players like Kraken, Bitfinex, Coinbase, Bitstamp, Binance, Coinmama, and CEX.IO. These exchanges accept a wide range of payments, including cash, wire transfers, credit cards, and other virtual assets.
Broking Services
The country also has a growing number of VA broking firms, which facilitate transactions between fiat currency and virtual assets. Some of these firms operate Automated Teller Machines (ATMs) that allow users to purchase VAs using cash or debit cards.
VA Management Providers
In addition to exchange and broking services, Mauritius is also home to a number of VA management providers. These firms offer investment vehicles that enable investors to invest in virtual assets, as well as providing guidance on risk management and asset segregation.
Regulatory Environment
The island nation’s regulatory environment has been praised for its relative lack of red tape, making it an attractive destination for companies seeking to establish themselves in the VA sector. However, this lack of regulation also raises concerns about money laundering and terrorist financing (ML/TF) risks.
Risk Assessment Working Group Report
A recent report by the Risk Assessment Working Group highlighted the need for enhanced ML/TF measures in the VA sector. The report noted that some VA exchanges and related entities may be interacting with informal sectors, such as the black market, which could increase the risk of illicit financing.
VASP Channels Interact with Sectors
The Risk Assessment Working Group assessed the interaction between VASP channels and sectors in Mauritius. The group identified two main ecosystems: the formal sector, which includes regulated entities that comply with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations; and the informal sector, which includes players and entities that operate outside of these regulations.
Table 3: Sector Interaction with VASP Channels
| Sector | VASP Channels |
|---|---|
| Banking | 7 |
| NBFI | 7 |
Conclusion
The report highlights the need for enhanced ML/TF measures to counter the risks posed by informal sectors and unregulated entities. The government and regulatory bodies must work together to ensure that the VA sector operates in a safe and secure environment.
As the global VA market continues to evolve, Mauritius is well-positioned to take advantage of its favorable regulatory environment and growing number of VA-related services. However, it is crucial that the country’s authorities prioritize ML/TF risks and implement measures to mitigate these threats.