As digital assets become more integrated into financial services, some Securities Dealers are exploring products or services that involve virtual assets, whether through crypto-linked CFDs, stablecoin-related activity or accepting cryptocurrency as payment. This raises the question on whether an existing Securities Dealer licence is sufficient or a separate VASP licence could also be required.
The Securities Act, 2007 and the Virtual Asset Service Providers Act, 2024 operate as two separate licensing regimes. A Securities Dealer licence authorises the securities business permitted under that licence, while the VASP framework regulates specified virtual asset services carried on in or from Seychelles.
The regulatory perimeter
The VASP framework sets out four categories of permissible activity: virtual asset wallet provider, virtual asset exchange, virtual asset broking and virtual asset investment provider.
A Securities Dealer looking to expand into this space should consider whether its proposed business involves exchanging virtual assets for fiat or other virtual assets, acting as an intermediary in buying, selling or trading virtual assets, holding or controlling virtual assets for clients or providing investment advice in relation to virtual assets.
More than one category may apply depending on the business model, so the firm’s actual role and activities are important.
Virtual asset exposure does not automatically mean VASP activity
CFDs are a good example of why the nature of the activity matters. In Circular No. 3 of 2025, the FSA confirmed that a Securities Dealer authorised to offer CFDs does not provide a virtual asset service merely because the CFD has a virtual asset as its underlying asset. A CFD does not involve the purchase or ownership of the underlying virtual asset, physical delivery or a transaction on a blockchain.
However, the FSA expects Securities Dealers offering virtual asset CFDs to apply appropriate suitability assessments, risk disclosures and client protections. Marketing should also be handled carefully and should not actively target retail clients where the product may be unsuitable.
What about stablecoins?
Stablecoins raise a related but slightly different point. In its Public Statement of 20 June 2026, the Seychelles FSA confirmed that stablecoins, in their current form and usage within the domestic market, are not classified as virtual assets under the VASP Act. But the instrument and the service around it are two different things. Exchange, broking, custody or investment advice involving stablecoins can still require VASP licence, depending on the activities being undertaken.
For Securities Dealers, the important point is to consider both the instrument and the activity, rather than assuming all virtual asset-related business falls into one bucket.
Payments and working with third-party VASPs
Simply accepting cryptocurrency as payment for the firm’s own services will not, by itself, necessarily mean the firm is providing a virtual asset service. It is a different story if the firm starts holding virtual assets for clients, exchanging virtual assets and fiat to fund client accounts or facilitating virtual asset holding or exchange on a client’s behalf. Any of these activities can bring VASP authorisation into play.
Where a third-party VASP is involved, the analysis turns on the Securities Dealer’s role. If the client deals directly with a regulated third-party provider, the Securities Dealer is not automatically treated as the one providing the virtual asset service. But if the firm is acting for or on behalf of the client in facilitating that service, the arrangement can fall within the VASP framework. This distinction matters most when structuring relationships with exchanges, wallet providers and other digital asset service providers.
Can one company hold both licences?
Yes. An existing Securities Dealer can apply for a VASP licence through the same legal entity, subject to meeting the applicable VASP licensing requirements.
Holding a Securities Dealer licence does not automatically satisfy the requirements for VASP authorisation. The company will be assessed against the VASP framework, including the applicable requirements relating to governance, substance, capital, systems and controls, cybersecurity, AML/CFT and other operational requirements.
Existing governance, compliance and operational arrangements may provide a foundation for the VASP application, but they should be reviewed and enhanced where necessary to meet the requirements applicable to the proposed VASP activities.
What else should Securities Dealers consider?
A VASP licence comes with specific ongoing operational and compliance requirements. Depending on the activities authorised, these include minimum capital, financial resources and insurance requirements, as well as requirements around client assets, safeguarding, accounting and record-keeping.
VASPs must also meet Seychelles substance requirements, including having a Seychelles-resident director, a fully manned office in Seychelles, appropriately qualified staff and arrangements for maintaining records and handling complaints in Seychelles.
Cybersecurity is another important area. VASPs are required to maintain appropriate cybersecurity systems and controls, business continuity arrangements and testing programmes, including vulnerability assessments and penetration testing.
For firms handling client assets, the safeguarding framework also requires appropriate segregation, record-keeping, reconciliation and controls over the use of client assets, including requirements relating to sub-custodians where applicable.
Securities Dealers and VASPs are both subject to Seychelles’ AML/CFT framework, but expanding into virtual asset activities requires the firm’s existing controls to be updated for the additional risks and VASP-specific requirements. These include the Travel Rule, virtual asset transfer requirements and restrictions on simplified due diligence where applicable. VASPs must also capture specific information for suspicious transaction reports involving virtual assets, including wallet details, IP addresses and transaction hashes where relevant.
The focus should therefore be on ensuring that the firm’s existing governance, systems and controls are properly adapted to the virtual asset activities it intends to undertake.
Before expanding
Before expanding into virtual asset services, Securities Dealers should consider:
- What activity will the firm actually perform?
- What type of instrument is involved?
- Is the activity already covered by the firm’s Securities Dealer licence?
- Does the activity fall within the VASP framework?
Addressing these questions at the outset allows the firm to establish the appropriate licensing and compliance framework.
How FiveComply can assist
FiveComply supports Securities Dealers considering an expansion into virtual asset services by assessing the proposed business model, helping businesses understand the applicable regulatory requirements and supporting VASP licence applications.
If your business is considering offering virtual asset-related products or services, contact FiveComply to learn how we can support your licensing and compliance framework.
Disclaimer: This article is for general information only and should not be relied upon as legal, regulatory, tax or other professional advice. Appropriate professional advice should be obtained in relation to your specific circumstances before taking any action.
