The Virtual Asset Act has a two-fold objective. First, to provide for a legal framework within which business activities related to digital assets may operate and develop in line within the international market. Secondly, to meet with the international standards of the Financial Action Task Force by managing, mitigating and preventing money laundering and the financing of terrorism and proliferation risks (AML/CFT) associated with these emerging business practices. Hence the FSC Guidance Notes.

The Virtual Asset Act introduces the concepts of ‘virtual asset’ and the ‘virtual asset service provider’ into the Mauritian legal landscape and, vests the FSC with the following powers:

(a)    issue VASP licenses;

(b)    register issuers of initial token offerings; and

(c)     determine whether VASP and issuers of initial token offerings fully comply with their obligations to combat anti-money laundering and the financing of terrorism and its proliferation.

The FSC is the regulator for both a VASP and issuer of initial token offering and, confirmed in a communique which it issued on 08 April 2022 that applications for a VASP licence and for an issuer of initial token offering are made on the FSC’s online platform.



The Virtual Asset 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.

As to a ‘digital token offering’, it denotes 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.

Who is a Virtual Asset Service Provider?

The Virtual Asset Act provides for 5 types of licences for a VASP namely:

Class I (Virtual Asset Advisor):Participating and providing financial services related to an issuer’s offer and/or sale of virtual asset
Class M (Virtual Asset Broker-Dealer):Exchanges between either virtual assets and fiat currencies or one or more types of virtual assets
Class O (Virtual Asset Wallet Services): Transfer of virtual assets
Class R (Virtual Asset Custodian): Safekeeping and administration of virtual assets or instruments enabling control over virtual assets
Class S (Virtual Asset Market Place): 
Virtual Asset Exchange


Substantive Requirements

An applicant for a VASP licence must satisfy the following conditions in order to be granted a VASP licence by the FSC:

(a)      possess the adequate resources, infrastructure, staff with the appropriate competence, experience and proficiency to undertake the business activities of a VASP;

(b)      implement the adequate arrangements for proper supervision of activities under the VASP licence;

(c)       the applicant and each of its controllers, beneficial owners, their associates and officers must each meet with the requirement of a fit and proper person to carry out the business activities related to the VASP licence;

(d)      once licensed, the applicant must satisfy any criteria or standards, including prudential standards which the FSC may issue; and

(e)      no prejudice would be caused or would ensue to the financial services industry, if the application for the VASP licence were to be granted to the applicant.

The Virtual Asset Act has also vested the FSC with the power to consider (i) any international standing which relate to matters falling under the Virtual Asset Act and (ii) any information received from a foreign regulator or a foreign enforcement authority.

Additional Requirement – Physical office in Mauritius

Under the Virtual Asset Act, the business activities of a VASP must be directed and managed from a physical office in Mauritius.

In order to meet this requirement, a VASP must establish the following criteria to the satisfaction of the FSC:

(a)    the place where the strategy, risk management and operational decision making of the VASP occurs;

(b)    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;

(c)    the place where meetings of the board of directors of the VASP take place;

(d)    the residence of the officers or employees of the VASP; and

(e)    the residence of one or more directors of the VASP.

Statutory Obligation of a VASP

The Virtual Asset Act creates certain obligations on a VASP namely:

(a)    maintain, in its custody, a sufficient amount of each type of virtual asset in order to meet its obligations to clients where it has custody of one or more virtual assets for one or more clients;

(b)    ensure that the systems and controls applied to its business activities are adequate and appropriate for the scale and nature of those business activities;

(c)    maintain such minimum stated unimpaired capital and such other financial requirements as may be prescribed by the FSC;

(d)    keep accounts of virtual assets of clients separate from any accounts maintained for any other business; and

(e)    file with the FSC yearly audited financial statement in respect of all transactions and balances relating to its business activities no later than 4 months after the close of its financial year.

Who is an Issuer of Initial Token Offerings?

Under the Virtual Asset Act, an application to be registered as an issuer of initial token offerings is lodged with the FSC through a virtual exchange in Mauritius or its equivalent acceptable to the FSC at least 45 days before the start of the offer period.

Obligations of Issuers of Initial Token Offerings

Under the Virtual Asset Act, an issuer of initial token offerings is required, amongst others, to:

(a)          provide in its white paper, full and accurate disclosure of information which would allow potential purchasers to make an informed decision;

(b)          publish its white paper by posting a copy on a website operated and maintained by it, or by a third party for and on its behalf, which shall be readily accessible to, and downloadable by, potential purchasers for the duration of the offer period and for not less than 15 days after the offer period ends; and

(c)           disclose any information which could affect the interests of purchasers by immediately giving written notice to the FSC upon being aware of such information after publication of its white paper but before the close of the offer period.


The FSC Guidance Notes are understood to guide VASPs and issuers of initial token offering on their AML/CLFT obligations. These have been comprehensively set out by the FSC and will not be replicated here.

However, by way of indication the following are noteworthy in respect of both:

  • they must comply with the applicable AML/CLFT legislations;
  • they must undertake the customary customer due diligence including enhanced due diligence in specific circumstances identified in the FSC Guidance Notes; and
  • they must implement and maintain effective transaction monitoring systems.

The Virtual Asset Act and the FSC Guidance Notes come at an opportune time for Mauritius. Amongst other things, they confirm the ambition of the Mauritian Government to weather through the unprecedented challenges which the COVID-19 pandemic has brought about by setting up the legal environment for emerging technologies as a way ahead to boost the Mauritian economy.

Twitter LinkedIn Email Save as PDF
More News