The Virtual Assets and Initial Token Offering Services Act 2021 (the “Act”) came into force on 7 February 2022.
The Virtual Assets and Initial Token Offering Services Act 2021 (the “Act”) was passed by the Mauritian National Assembly on 10 December 2021, gazetted on 16 December and came into force on 7 February 2022. The Act introduces the requisite legal and regulatory framework for regulating Initial Token Offerings and Virtual Assets services providers and ensuring these activities are in line with AML/CFT norms recommended by the Financial Action Task Force (FATF).
Under the Act, ‘virtual asset’ is defined as a digital representation of value that may be digitally traded or transferred, and can be used for payment or investment purposes but does not include a digital representation of fiat currencies, securities and other financial assets that fall under the purview of the Securities Act 2005.
“Initial Token offerings” (ITO) is defined as an offer for sale to the public, by an issuer of ITOs, of a virtual token in exchange for fiat currency or another virtual asset.
To be able to provide services in relation to virtual assets in or from Mauritius, a company will need to apply for and hold a VASP license from the FSC. An application for a VASP license, specifying the relevant class of license sought along with the requisite documents, must be submitted. The different classes of VASP license that can be applied for are as follows:
Class “M” Virtual Asset Broker-Dealer
- exchange between virtual assets and fiat currencies; or
- exchange between one or more forms of virtual assets
Class “O” Virtual Asset Wallet
- transfer of virtual assets
Class “R” Virtual Asset Custodian
- safekeeping of virtual assets or instruments enabling control over virtual assets; or
- administration of virtual assets or instruments enabling control over virtual assets
Class “I” Virtual Asset Advisory Services
- participation in and provision of financial services related to an issuer’s offer and/or sale of virtual assets
Class “S” Virtual Asset Market Place
- a virtual asset exchange
A Virtual Asset Service Provider under the Act would be subject to prudential and regulatory requirements such as maintenance of a prescribed minimum stated capital, having systems and controls to prevent market abuse and maintenance of segregated accounts, amongst others.
Issuers of Initial Token offerings are required under the Act to be registered with the FSC before issuing ITOs. They will need to, inter alia, prepare a White Paper setting out particulars of their proposed offering of tokens to be filed with the FSC and used for marketing purposes to investors.
The Act provides that unlicensed VASP and issuers of ITOs who have been operating prior to the commencement of the Act, or persons operating activities of a VASP or issuers of ITO under a licence, a registration or any authorisation issued or granted under the Financial Services have a deadline of 3 months after the commencement of the Act to be duly licensed or registered.
Furthermore, a person operating business activity of a custodian (digital assets) under a licence issued under the Financial Services Act 2007, shall, notwithstanding the Financial Services Act, make an application no later than 18 months after the commencement of the Act, to be licensed as a virtual asset service provider or for registration as an issuer of initial token offerings, as the case may be under the Act.
On 9 February 2022, the FSC issued a list of FAQs which can be accessed here:https://www.fscmauritius.org/media/119933/faqs-vaitos-act-2021-final.pdf
This highlight is for information purposes only. While every care has been taken to make it as comprehensible as possible, it may have omitted information that is useful to a particular reader. You are urged to seek professional advice as may be required and not rely on this highlight as advice or opinion.