The introduction of virtual assets and initial token offerings services Act 2021

The introduction of virtual assets and initial token offerings services Act 2021

The Virtual Asset and Initial Token Offering Services Act 2021 (the “Act”) came into force on the 7th of February 2022. Under the Act, the Financial Services Commission (“FSC”) is in charge of regulating and overseeing Virtual Asset Service Providers (“VASPs”) and Initial Token Offering (“ITO”) issuers. The Act was developed in accordance with international standards established by the Financial Action Task Force to manage, mitigate and prevent anti-money laundering and countering the financing of terrorism risks associated with these emerging and innovative business activities. Furthermore, the FSC issued Guidance Notes for VASPs and Issuers of ITO on 28 February 2022.




Class of licence

Business activities


Any VASP that conducts one or more of the following business activities:

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 Services

  • transfer of virtual assets

Class “R” Virtual Asset Custodian

  • safekeeping of virtual assets or instruments enabling control over virtual assets 
  • 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


  1. Requirement to be licensed
    No person shall carry out the business activities of a VASP in or from Mauritius unless he is the holder of a VASP’s licence.

  2. Applying for a licence
    1. No person, other than a company, shall carry out the business activities of a VASP.
    2. An application for a licence shall:
      1. be made in such form and manner as the FSC may approve;
      2. specify the class of licence being applied for; and
      3. be accompanied by:
        1. the certificate of incorporation of the company;
        2. a business plan or feasibility study setting out, amongst others, the nature and scale of the business activities proposed to be carried out;
        3. particulars of the applicant’s arrangements for the management of its business activities;
        4. policies and measures to be adopted by the applicant to meet its obligations under this Act, the Financial Intelligence and Anti-Money Laundering Act and the United Nations (Financial Prohibition, Arms Embargo and Travel Ban) Act 2019 relating to anti-money laundering and combatting the financing of terrorism and proliferation;
        5. particulars and information relating to customer due diligence of promoters, beneficial owners, controllers and directors;
        6. a written authorisation given by each of the directors of the applicant or by at least 2 directors duly authorised by a resolution of the board of directors, for any regulatory body, law enforcement body or financial institution, in Mauritius or in a foreign country, to release to the FSC, for use in respect to the application and enforcement of this Act, any information about the applicant, and any of its promoters, beneficial owners, officers and controllers, as may be applicable; and
        7. such application fee as prescribed in FSC Rules.
      4. The FSC may require an applicant to:
        1. give such other information, document or report in connection with the application; and
        2. have any information submitted in support of the application verified at the cost of the applicant.

  3. Office premises of VASP
    1. A VASP shall have a physical office in Mauritius.
    2. The business activities of a VASP shall be directed and managed from Mauritius and, in determining whether it complies with this requirement, the Commission may consider, inter alia, the following factors:
      1. where the strategy, risk management and operational decision making of the VASP occurs;
      2. whether the presence of executives who are responsible for, and involved in, the decision making related to the business activities of the VASP are located in Mauritius;
      3. where meetings of the board of directors of the VASP take place;
      4. where management of the VASP meets to effect policy decisions;
      5. the residence of the officers or employees of the VASP; and
      6. the residence of one or more directors of the VASP.

  4. Appointment of officers and senior executive
    1. A VASP shall not appoint an officer without the prior approval of the Commission.
    2. A VASP shall not appoint a senior executive without the prior approval of the Commission. The senior executive should be a natural person resident in Mauritius; and of at least senior management level, in such manner as prescribed under the Financial Intelligence and Anti-Money Laundering Act.

  5. Responsibilities of VASPs
      1. A VASP that has custody of one or more virtual assets for one or more clients shall maintain, in its custody, a sufficient amount of each type of virtual asset in order to meet its obligations to clients.
      2. The virtual asset referred to in subsection (1) shall:
        1. be held by the VASP for the client entitled to the virtual asset;
        2. not be the property or virtual asset of the VASP; and
        3. not be subject to the claims of creditors of the VASP.
      3. VASPs shall ensure that the systems and controls applied to their business activities are adequate and appropriate for the scale and nature of those business activities, including systems and controls which adequately and appropriately address:
        1. the recording, storing, protecting and transmission of information;
        2. the effecting and monitoring of transactions;
        3. the operation of the measures taken for securing the timely discharge, whether by performance, compromise or otherwise, of the rights and liabilities of the parties to transactions;
        4. the safeguarding and administration of assets belonging to investors; and
        5. in the event of disruption, business continuity and planning.
      4. VASPs that hold a Class “S” licence shall also ensure that the systems and controls cover, in respect to its virtual asset exchange:
        1. identification and detection of suspicious price spikes or anomalies;
        2. prevention and monitoring of abusive trading strategies; and
        3. immediate steps for the restriction or suspension of trading upon discovery of market manipulative or abusive trading activities, including temporarily freezing of accounts.

    VASPs holding a Class “S” licence will have to, as soon as practicable, give written notice to the FSC when they become aware of any market manipulative or abusive trading activities on their virtual asset exchange, implement appropriate remedial measures and provide the FSC with additional assistance.

  6. Financial Obligations of VASPs
    1. A VASP shall maintain such minimum stated unimpaired capital and such other financial requirements, as prescribed in FSC Rules.
    2. A VASP that holds virtual assets of clients shall keep their accounts in respect of such assets separate from any accounts kept in respect of any other business.
    3. A VASP shall, every year but not later than 4 months after the close of its financial year, file with the FSC an audited financial statement in respect of all transactions and balances relating to its business activities.

Leave A Reply