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Mauritius Seeks to Regulate Cryptocurrency and Token Offerings
Port Louis, Mauritius - The Financial Services Commission (FSC) of Mauritius has announced plans to regulate cryptocurrency and token offerings in the island nation. The move aims to provide a framework for the growing fintech industry, while ensuring investor protection and preventing financial crimes.
Regulatory Framework
The FSC will issue guidelines for Initial Token Offerings (ITOs), which include equity tokens, access tokens, and cryptocurrencies. Equity tokens, which are akin to securities, will be regulated by the FSC as “securities” under the Securities Act 2005 (SA). Any offer, trading, or solicitation related to these tokens will require a license.
Cryptocurrencies
Cryptocurrencies, such as Bitcoin and Ethereum, will not be considered as “securities” unless they have an investment function. However, investments in digital assets, including cryptocurrencies, are high-risk and not suitable for retail investors. The FSC has issued guidance notes on investing in digital assets, warning that investors are not protected by any statutory compensation arrangement.
Custody Services
The FSC will set up a regulatory framework for custody services of digital assets, issuing the Custody Services (Digital Asset) license under section 14 of the Financial Services Act. The holder of this license will be authorized to hold digital assets of both Collective Investment Schemes and Non-CIS.
Digital Asset Marketplaces
The FSC is creating a regulatory framework for Digital Asset Marketplaces, which will allow for the buying, selling, or exchanging of digital assets for fiat currencies or other forms of digital assets. The “Digital Asset Marketplace” license will be issued under section 14 of the Financial Services Act.
Anti-Money Laundering and Combatting Financing of Terrorism
Uniform anti-money laundering (AML) and combating financing of terrorism (CFT) requirements will apply to the Mauritian financial services sector. Fintech service providers licensed by the FSC will need to have effective AML/CFT programs in place.
Cybersecurity and Cyber-Resilience
The FSC is emphasizing the importance of cybersecurity and cyber-resilience for fintech operators, given the growing threat of cyber attacks. Licensed fintech service providers will be required to have dedicated in-house cybersecurity personnel and effective cybersecurity programs.
Panel Discussions
Industry experts will gather at a series of panel discussions to discuss the regulatory framework and its implications for the fintech industry in Mauritius. The events aim to provide clarity on the new regulations and offer insights into best practices for fintech operators.
The move by the FSC is seen as a positive step towards establishing Mauritius as a hub for fintech innovation, while ensuring that investors are protected and financial crimes are prevented.