Mauritius FSC issues rules for Virtual Assets and Initial Token Offerings

The Mauritius Financial Services Commission (FSC) issued a communiqué on 15 July to highlight the issue of rules issued under the Virtual Asset & Initial Token Offerings Services (VAITOS) Act 2021, following consultations with stakeholders.

The communiqué provides links to detailed rules to regulate and govern the issuance of Virtual Assets (VAs) and Initial Token Offerings (ITOs) in terms of: Capital and other financial requirements, Client Disclosure, Custody of Client Assets, Cybersecurity, Publication of Advertisements, Risk Management and Statutory Returns.

The VAITOS Act was brought into force on the 7 February 2022. It provides for a regulatory framework for new and developing activities regarding Virtual Assets (VAs) and Initial Token Offerings (ITOs) in Mauritius, as well as to safeguard against money laundering and financing of terrorism associated with VAs.

VAs have grown exponentially in recent years – from 66 VAs worldwide in 2013, to 7,557 in November 2021 according to data provider Statista. As of November 2021, the total market capitalization of all crypto assets, including stablecoins and tokens, amounted to almost USD2.6 trillion.

As an international financial centre and growing FinTech hub, has proactively responded to the adoption of emergent technologies, such as Blockchain and artificial intelligence, in the financial services sector. The FSC has recognised VA as an investible asset class for sophisticated investors and professional/expert funds since 2018. It also introduced a bespoke licensing regime for custodians of VAs.

Mauritius is now amongst the first countries in the Eastern and Southern African region to adopt comprehensive legislation on VAs and ITOs. The VAITOS Act provides a clear and comprehensive basis for operators as FinTech develops in Mauritius, whilst aligning the legal framework for regulating such class of assets with international standards.

The VAITOS Act empowers the FSC to regulate and supervise Virtual Asset Service Providers (VASPs) and issuers of ITOs within the non-bank financial services sector in Mauritius. Regulating services involving VAs help to ensure that only legitimate business takes place in the country, which in turn protects the users of these services.

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