Seychelles financial and monetary authorities are discussing the future use of cryptocurrency in the country following the international community raising the red flag on OneCoin pyramid scheme.
The international investigation conducted as of last month on cryptocurrency trading platforms scams and frauds have been traced back to Seychelles.
One recent case is OneCoin which is under investigation following multiple transaction involving the transfer of 230,000 Bitcoins.
Additionally the transaction also included cash and property worth over $10 billion in what’s become known as the OneCoin pyramid scheme.
Due to this fraudulent activities the Seychelles Financial Services Authority and the Ministry of Finance are working on a policy to either prohibit or licence the incorporation of cryptocurrency trading platforms as International Business Companies (IBC) registered in the island nation.
The director at the Anti-Money Laundering and Terrorist Financing (AML/CFT) section, Randolf Samson, told the media that most online activities involving cryptocurrency are outside of the island nation’s jurisdiction.
“There are many incorporated companies that are facilitating that activity. The reason why they are use Seychelles is because we do not have a framework that would otherwise discourage them.
“Cryptocurrency developed quite fast but the laws of many countries are not up to date with this type of activity,” he said.
Samson added that the ministry of finance is working together with other stakeholders to develop the policy that will protect the public on the use of cryptocurrency
“At this point FSA together with the Ministry of Finance and other authorities are working on a policy that will have to be approved by the government so as to see if Seychelles will prohibit the activity or to license it.
“A risk assessment needs to be carried out to look at the pros and cons. If Seychelles stands to benefit from the activity, we will license it.
“From what it stands the use of cryptocurrency is highly risk as it has brings too much risk and bad reputation which might prompt to prohibition of its use in the island.
“The challenge with cryptocurrency, is the direction, the way things are going, you will have to take a stance as it is popular among a growing number of people and other countries are taking options to regulate this activity,” said Samson.
Samson outlined that once a company is incorporated in a country’s jurisdiction, the said country has a responsibility to ensure that the companies, and legal persons are not involved in illicit activities, like money laundering.
The primer of such a policy will also put Seychelles, an archipelago in the western Indian Ocean, in line with recent Financial Action Task Force (FATF) amendments made in June 2020.