Vanuatu has enacted legislation to regulate digital assets and establish a licensing system for crypto companies looking to operate in the Pacific island nation.
Described as “very strict” by a government regulatory advisor, the Virtual Asset Service Providers Act was passed on March 26.
This grants the Vanuatu Financial Services Commission (VFSC) the authority to issue crypto licenses and enforce Financial Action Task Force (FATF) standards for anti-money laundering, counter-terrorism financing, and travel rules.
The VFSC has extensive investigative and enforcement powers under this law, with penalties including fines up to 250 million Vatu (approximately 2 million USD) and prison sentences up to 30 years.
The legislation sets up a licensing and reporting framework for exchanges, NFT marketplaces, crypto custodians, and initial token offerings. It also permits banks to obtain licenses for crypto trading and custody services.
