Financial Crime World

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Mauritius Cracks Down on Unlicensed Virtual Asset Service Providers

The Financial Services Commission (FSC) of Mauritius has taken several actions to identify and regulate virtual asset service providers (VASPs) operating without licenses.

Immediate Cease Operations for Unlicensed VASPs

According to a communiqué issued by the FSC in February 2022, VASPs that are not licensed under the Virtual Asset and Initial Token Offering Service (VAITOS) Act must cease operations immediately. The public has been warned against dealing with unlicensed VASPs and encouraged to report any suspicious activities.

Communication and Awareness Campaign

The FSC has launched a communication and awareness campaign to educate the general public and business community on the importance of transacting only with licensed service providers. A dedicated hotline has been set up for reporting such cases and other related complaints from the public.

Establishing an Observatory

Mauritius is also establishing an Observatory that will monitor the market, identify patterns and transactions, scan and track new entrants, and share information with relevant authorities to prevent unlicensed VASPs from operating in the country.

Suspected Offenders

Despite these efforts, only seven individuals have been suspected of conducting business activities without a license under the VAITOS Act. However, the FSC can apply a range of sanctions against unregistered VASPs, including fines and criminal charges.

Risk-Based Supervision (RBS) Tools

The FSC has developed its Risk-Based Supervision (RBS) tools for financial institutions that also apply to VASPs. The supervisor is empowered to:

  • Obtain information from VASPs
  • Search and inspect their premises
  • Inspect their records
  • Give directions
  • Monitor them for AML/ CFT compliance

FATF Praise and Ongoing Efforts

Mauritius’ efforts have been praised by the Financial Action Task Force (FATF), which has re-rated the country as “Largely Compliant” with Recommendation 15. The rating reflects Mauritius’ progress in addressing deficiencies in technical compliance with FATF recommendations.

However, minor deficiencies remain, and Mauritius will continue to work towards improving its AML/ CFT effectiveness measures under enhanced follow-up from the FATF.