VIRTUAL ASSETS
The Virtual Asset and Initial Token Offering Act 2021 (VAITOS Act 2001), which came into force on 7 February 2022, introduced the concepts of ‘virtual asset’, ‘virtual asset service provider’ and ‘initial token offering’ into the Mauritian legal landscape.
The VAITOS Act defines a ‘virtual asset’ as a ‘digital representation of value that may be digitally traded or transferred and may be used for payment or investment purposes.’ However, it excludes digital representations of fiat currencies, securities and other financial assets which are captured under the Securities Act 2005.
Virtual Asset Service Provider has been defined as per the Act as a person that, as a business, conducts one or more of the following activities or operations for or on behalf of another person:
- Exchange between virtual assets and fiat currencies
- Transfer of virtual assets
- Safekeeping of virtual assets or instruments enabling control over virtual assets
- Participation in, and provision of, financial services related to
i) an issuer’s offer and sale of a virtual asset
ii)an issuer’s offer or sale of a virtual asset
As to an initial token offering (ITO), it indicates an offer by an issuer of an initial token offering to sell a virtual token to the public in exchange for fiat currency or another virtual asset.
The following types of licences are provided for a VASP:
| Code | Class of Licence | Activities | Minimum capital requirement |
|---|---|---|---|
| VT –1.1 | Issuers of Initial Token Offerings | An issuer of ITO means a company making an offer for sale to the public of a virtual token (i.e. any cryptographically secured digital representation of a set of rights, including smart contracts, provided on a digital platform and issued or to be issued by an issuer of initial token offerings) in exchange for fiat currency or another virtual asset. | Sufficient working capital to be capable of meeting its debts as they fall due. |
| VA – 1.1 | Virtual Asset Broker - Dealer (Class M) | Carry out activities such as exchange between virtual assets and fiat currencies; or exchange between one or more forms of virtual assets. | MUR 2,000,000 or its equivalent in any other fiat currency. |
| VA – 1.2 | Virtual Asset Wallet Services (Class O) | Transfer of virtual assets. | Sufficient working capital in fiat currency to continue business for a period of 12 months, based on realistic forecasts for the business in different market conditions (both negative and positive scenarios). |
| VA – 1.3 | Virtual Asset Custodian (Class R) | Responsible for safekeeping of virtual assets or instruments enabling control over virtual assets; administration of virtual assets or instruments enabling control over virtual assets. | MUR 5,000,000 or its equivalent in any other fiat currency. |
| VA – 1.4 | Virtual Asset Advisory Services (Class I) | Participation in and provision of financial services related to an issuer’s offer and/or sale of virtual assets. | Sufficient working capital to be capable of meeting its debts as they fall due. |
| VA – 1.5 | Virtual Asset Market Place (Class S) | Virtual asset exchanges must apply for a Class S (Virtual Asset Market Place) licence. A Virtual Asset Exchange is a centralised or decentralised virtual platform, whether in Mauritius or in another jurisdiction which facilitates the exchange of virtual assets for fiat currency or other virtual assets on behalf of third parties for a fee, a commission, a spread or other benefit and which – (i) holds custody, or controls virtual asset, on behalf of its clients to facilitate an exchange or (ii) purchases virtual assets 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. | MUR 6,500,000 or its equivalent in any other fiat currency. |
LMS can assist in:
-
- the obtention of any of the above-mentioned licences
- meeting the substance requirements for a VASP
- ensuring that the statutory obligations for a VASP are met
