What is the Virtual Asset and Initial Token Offering Services Act 2021
The Virtual Asset and Initial Token Offering Services Act 2021 (the “Act” or “VAITOS Act 2021”), has come into force on the 7th of February 2022. The Act 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.
What is a Virtual Asset?
A Virtual Asset (“VA”), according to the VAITOS Act 2021, is a digital representation of value which may be digitally traded or transferred, and may 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.
What categories of activities are licensed under this Act?
The Act regulates two main categories of activities:
A. VASP, meaning a person who conducts, as a business activity, for or on behalf of another person one or more of the following activities or operations, namely:
(i) exchange between VAs and fiat currencies;
(ii) exchange between one or more forms of VAs;
(iii) transfer of VAs;
(iv) safekeeping of VAs or instruments enabling control over VAs;
(v) administration of VAs or instruments enabling control over VAs; or
(vi) participation in, and provision of, financial services related to an issuer’s offer and sale of a VA; or an issuer’s offer or sale of a VA.
B. Issuers of ITOs, are companies registered under the Act and making issuance of ITOs. An ITO is an offer for sale to the public of a VT in exchange for fiat currency or another VA.
What are the benefits of the VAITOS Act 2021?
Mauritius, as an international financial centre and growing FinTech hub is amongst the first countries in the Eastern and Southern African region which has adopted a comprehensive legislation on VAs and ITOs. The VAITOS Act 2021 will provide 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.
Who regulates the VAITOS Act 2021 in Mauritius?
The Act empowers the Financial Services Commission, Mauritius (the “FSC”) to regulate and supervise Virtual Asset Service Providers (“VASPs”) and issuers of ITOs within the non-bank financial services sector in Mauritius.
Permissible Activities under each class
A Virtual Asset Exchange is a centralised or decentralised virtual platform, whether in Mauritius or in another jurisdiction which facilitates the exchange of VAs for fiat currency or other VAs on behalf of third parties for a fee, a commission, a spread or other benefit and which:
i. holds custody, or controls VAs, on behalf of its clients to facilitate an exchange or
ii. purchases VAs from a seller when transactions or bids and offers are matched in order to sell them to a buyer.
The definition of Virtual Asset Exchange also includes the owner or operator of the virtual platform, but excludes a platform only providing a forum where sellers and buyers may post bids and offers and a forum where the parties trade in a separate platform or in a peer-to-peer manner.