On 28th February 2025, the Financial Services Authority (FSA) Seychelles released Circular No. 3 of 2025, delivering important updates for Securities Dealers offering Contracts for Differences (CFDs) with Cryptocurrencies as underlying assets. With the world of digital finance rapidly evolving, staying ahead of regulatory shifts is more important than ever.
Under section 8 of Schedule 1 of the Securities Act, 2007, it is stated that ‘property of any description’ may serve as an underlying asset for CFDs, thereby permitting Virtual Assets to be included without requiring further legislative amendments.
FSA Key Statistics
- 190 Securities Dealers currently licensed in Seychelles.
- 187 licensees have been approved to offer CFDs under Schedule 1 of the Securities Act, 2007, covering a range of underlying assets, including but not limited to commodities, indices, forex, equities and cryptos.
- 105 entities (56%) are actively offering CFDs on Virtual Assets / Cryptocurrencies.
Determination on CFDS on Virtual Assets
The FSA has clarified that, CFDs involving Virtual Assets do not fall under the definition of Virtual Asset Services, as outlined in the Virtual Asset Service Providers Act, which was introduced in late 2024, as they do not involve the actual exchange, custody or transfer of ownership of Virtual Assets. According to the FSA, CFDs on Cryptos are to be regulated as standard CFD products under the Securities Act 2007, not as virtual asset services under the Virtual Asset Services Providers Act. This formal confirmation aligns with the approach previously followed by the FSA but now has been officially confirmed in writing through this Circular.
Why?
- Traders do not own the actual Virtual Assets; they only speculate on price fluctuations.
- CFDs are traded on platforms and not via blockchain, like traditional crypto-trading.
- There is no actual exchange of Virtual Assets, just a financial contract.
Expectations of the Authority
The FSA expects all licensees to adhere to the following measures:
- Securities Dealers must conduct suitability tests to ensure traders have the necessary experience and financial knowledge to engage in CFD trading, ensuring responsible market participation.
- All promotional material must clearly outline the risks associated with CFDs on Virtual Assets, particularly their high volatility and potential financial losses. Risk warnings must be prominent and easily accessible to traders.
- Securities Dealer Licensees must avoid misleading promotions and ensure that their advertising efforts do not inappropriately target retail investors who may lack sufficient knowledge of CFD trading risks.
- Licensees must maintain detailed records of client onboarding, suitability assessments, risk disclosures and trading activities. These records must be readily available for regulatory scrutiny and potential audits by the FSA to ensure compliance with financial regulations. These records must demonstrate compliance with suitability assessments, client classification and risk disclosures.
In today’s rapidly changing regulatory landscape, entities that prioritise compliance as a strategic asset are set to excel. Staying ahead means ensuring proper licensing, implementing robust internal policies, and building strong risk mitigation frameworks—these are not just necessities, but your keys to long-term success. Make compliance your advantage and thrive in the future.
At FiveComply, our local presence in Seychelles and our team of experts specialising in Seychelles licensing and compliance are perfectly positioned to provide comprehensive A-Z solutions. Whether you are applying for a new license or require support with setup and operations, our dedicated team is ready to assist you every step of the way.