Cabo Verde

**Banco de Cabo Verde (BCV) Stance:**

The Banco de Cabo Verde (BCV), the central bank, has repeatedly issued public warnings regarding the risks associated with cryptocurrencies.

It has clarified that cryptocurrencies are **not legal tender** in Cabo Verde.

**Regulatory Reference (BCV):** While a specific URL for a single definitive statement might be hard to pin down as policies evolve and are communicated via press releases or general warnings, the BCV's official website is the primary source for their stance:

**Banco de Cabo Verde Official Website:** https://www.bcv.cv/

**Lack of Dedicated Licensing Regime:**

There are no specific laws or regulations that define a licensing framework for crypto exchanges, custody providers, or payment processors as distinct categories of financial institutions.

Unlike jurisdictions with bespoke crypto licenses (e.g., Malta, Gibraltar, UAE), Cabo Verde has not established such a system.

**Neither a specific licensing nor a dedicated registration regime** for Virtual Asset Service Providers (VASPs) exists in Cabo Verde.

Entities wishing to operate a business (including a crypto-related one) would need to comply with general company registration laws in Cabo Verde, but this is distinct from obtaining a financial services license.

If a company were to deal with **fiat currency** in a way that constitutes a traditional financial service (e.g., remittances, payment processing of traditional money), then *those specific activities* would fall under the BCV's existing licensing requirements for financial institutions, which are separate from crypto activities.

Cabo Verde has updated its AML/CFT laws to align with FATF recommendations, which include virtual assets and VASPs.

The **Financial Intelligence Unit (Unidade de Informação Financeira - UIF)** is the national authority responsible for receiving, analyzing, and disseminating suspicious transaction reports.

**Key Law:** **Lei n.º 1/IX/2021, de 16 de março**, on the Prevention and Combat of Money Laundering and the Financing of Terrorism, explicitly defines "Ativo Virtual" (Virtual Asset) and "Prestador de Serviços de Ativos Virtuais" (Virtual Asset Service Provider) and subjects them to AML/CFT obligations.

**UIF Cabo Verde Official Website:** https://www.uif.cv/ (This site provides information and guidance related to AML/CFT, including reporting obligations).

**Specific AML/CFT Requirements for VASPs (as "Reporting Entities"):**

**Customer Due Diligence (CDD/KYC):** Implementing robust KYC procedures to identify and verify the identity of customers, including beneficial owners. This means collecting name, address, date of birth, national ID, etc.

**Enhanced Due Diligence (EDD):** For higher-risk customers or transactions.

**Record-Keeping:** Maintaining records of customer identification data and transaction details for a specified period (typically 5-7 years).

**Suspicious Transaction Reporting (STR):** Reporting any suspicious transactions or activities to the UIF without delay.

**Risk Assessments:** Conducting a thorough assessment of money laundering and terrorist financing risks associated with their business operations, customers, products, and services.

**Internal Controls:** Establishing and maintaining appropriate internal policies, procedures, and controls to mitigate ML/TF risks, including the appointment of an AML compliance officer and staff training.

**Sanctions Compliance:** Adhering to national and international sanctions lists.

There are **no specific capital requirements** for crypto companies *as such*, due to the absence of a dedicated licensing regime.

However, any company registered in Cabo Verde must meet general corporate capital requirements for its chosen legal form (e.g., limited liability company). If a VASP were to engage in activities requiring a traditional financial license, then the BCV's substantial capital requirements for such licenses would apply.

There are **no specific local presence requirements** *for crypto activities alone*.

However, any company establishing a legal entity and operating physically in Cabo Verde would need to comply with general business registration and operational requirements, which often imply a local office, local directors (or resident representatives), and staff.

There is **no specific application process** for a "crypto license" in Cabo Verde.

If a VASP wishes to operate, its primary formal step would be to **register as a general commercial entity** with the relevant government agencies (e.g., Conservatória do Registo Comercial) and ensure compliance with tax, labor, and general business laws.

The most crucial ongoing "compliance" aspect would be rigorous adherence to the **AML/CFT obligations** under Lei n.º 1/IX/2021, including registering with and reporting to the UIF as required.

**Ensure robust AML/CFT compliance** from day one, in line with the Lei n.º 1/IX/2021 and guidance from the UIF.

**Monitor regulatory developments**, as the global landscape for crypto regulation is rapidly evolving, and Cabo Verde may introduce more specific frameworks in the future.

**Banco de Cabo Verde (BCV):** The central bank, responsible for monetary policy, financial stability, and prudential supervision. It has issued warnings and guidance on virtual assets.

**Comissão Nacional do Mercado de Valores Mobiliários (CNMVM):** The national securities commission, responsible for regulating the securities market.

**Agência Reguladora Multissectorial da Economia (ARME):** A multisector regulatory agency, which might have a role in some digital service aspects but less directly on securities classification.

**Investment Contract:** Where an investor (1) invests money (or other value) (2) in a common enterprise (3) with an expectation of profit (4) primarily from the efforts of others. This is the underlying principle behind tests like Howey, and it is a common legal concept in many jurisdictions.

**Shares or Participations:** Tokens representing ownership or a stake in a company or project.

**Bonds or Debt Instruments:** Tokens representing a loan that promises repayment with interest.

**Units in Collective Investment Schemes:** Tokens representing an interest in a fund or pooled investment.

**Investment Tokens (Security Tokens):** These are explicitly designed to represent traditional financial assets like equity, debt, or derivatives. They are the clearest examples.

**Asset-Backed Tokens:** Tokens representing ownership of physical assets (real estate, art, commodities), where the primary purpose is investment and speculation rather than direct utility of the underlying asset.

**Initial Coin Offerings (ICOs) / Security Token Offerings (STOs):** If the tokens are sold to raise capital for a project, and purchasers expect a return based on the project's success or the efforts of the issuer/team, they would very likely be deemed securities.

**Some Utility Tokens:** Even if labeled "utility," if the primary marketing and investor expectation is capital appreciation rather than immediate consumption of a service, and their value is tied to the efforts of the issuer, they could be reclassified as securities. This is particularly true if the utility is not yet functional or widely available at the time of sale.

**Registration/Authorization:** The issuer would need to register the offering with the **CNMVM** or obtain specific authorization before making the token available to the public. This would involve significant disclosure requirements.

**Prospectus Requirements:** Issuers would likely need to prepare and publish a detailed prospectus, providing comprehensive information about the token, the issuer, the underlying project, risks, and financial details, similar to a traditional public offering of shares or bonds.

**Issuer Obligations:** Compliance with ongoing reporting, governance, and transparency requirements.

**Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT):** Even if a token is not a security, the BCV has emphasized that all entities dealing with virtual assets are subject to AML/CFT obligations. This is the most developed area of crypto regulation in Cabo Verde so far.

**Authorized Trading Platforms:** Trading would generally need to occur on regulated exchanges or platforms authorized by the CNMVM. Cabo Verde does not currently have specific regulated crypto exchanges for security tokens.

**Licensed Intermediaries:** Broker-dealers and other intermediaries facilitating the trading would need to be licensed by the CNMVM.

**Market Conduct Rules:** Rules against market manipulation, insider trading, and other abusive practices would apply.

**AML/CFT:** All participants in secondary trading, including exchanges and intermediaries, would be subject to stringent AML/CFT requirements.

**Warnings and Alerts:** Issuing warnings to the public about the risks associated with virtual assets, emphasizing their speculative nature, lack of regulation, and potential for fraud.

**AML/CFT Compliance:** Stressing that financial institutions and other entities involved in virtual asset activities must comply with existing AML/CFT laws.

**Banco de Cabo Verde (BCV) Official Website:**

This is the primary source for BCV communications, circulars, and warnings regarding financial matters, including virtual assets.

**BCV Circular nº 12/2022, de 16 de setembro de 2022 (Circular on virtual assets):**

This circular defines virtual assets and virtual asset service providers (VASPs) and outlines AML/CFT obligations for entities dealing with them. While not a securities law, it is the most significant regulatory document specific to crypto from the BCV.

**Finding it:** You would typically navigate to the "Legislação" or "Circulares" section on the BCV website and search for the specific circular number and date. Direct PDF links can change, so searching their site is best. *As of my last update, a direct, stable public URL specifically for this circular wasn't universally available, but its existence and content are well-documented.*

This is the relevant securities regulator. Any specific guidance on crypto securities would originate here or be communicated through their channels. As of now, specific detailed guidance on crypto securities is not prominently featured.

**Cabo Verdean Securities Market Code (Código do Mercado de Valores Mobiliários):**

This is the underlying law that would define what constitutes a "security" or "financial instrument" in Cabo Verde. Finding a direct, public, up-to-date online version of this code might require searching legal databases or government gazettes, as specific legislative texts are not always hosted on regulatory websites.

**Law No. 10/VIII/2011, of 23 May:** This is the foundational law on the Prevention and Combat of Money Laundering, Financing of Terrorism and Proliferation of Weapons of Mass Destruction. It establishes the general framework for AML/CFT obligations, including customer due diligence, suspicious transaction reporting, and record-keeping.

**Decree-Law No. 4/2015, of 19 January:** This decree-law approves the Regulation for the Implementation of Law No. 10/VIII/2011, providing more detailed guidance on how the AML/CFT obligations are to be met.

**Circulars and Regulations from the Central Bank of Cabo Verde (Banco de Cabo Verde - BCV):** The BCV issues specific instructions and guidelines to financial institutions under its supervision to ensure compliance with the AML/CFT framework. While there might not be explicit crypto-specific circulars yet, general AML/CFT circulars apply, and the BCV would interpret their scope to include relevant virtual asset activities.

**Individuals:** Obtain and verify identity using reliable, independent source documents, data, or information (e.g., full name, date of birth, nationality, physical address, unique identification number like a passport or national ID).

**Legal Persons/Entities:** Obtain and verify legal name, legal form, proof of existence, powers that regulate and bind the entity, and names of individuals holding senior management positions. Identify and verify the ultimate beneficial owner (UBO) – typically any natural person holding 25% or more of the shares or voting rights, or otherwise exercising control.

**Understanding Purpose and Nature of Business Relationship:** Obtain information on the purpose and intended nature of the business relationship or occasional transaction.

**Ongoing Monitoring:** Continuously monitor the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes reviewing customer records and updating information as needed.

**Risk-Based Approach:** Apply CDD measures on a risk-sensitive basis:

**Simplified Due Diligence (SDD):** May be permitted for lower-risk customers or transactions, provided the VASP can demonstrate the lower risk.

**Enhanced Due Diligence (EDD):** Required for higher-risk customers or transactions, including:

Customers from high-risk jurisdictions (as identified by FATF or local authorities)

Complex, unusually large transactions, or unusual patterns of transactions that have no apparent economic or lawful purpose.

Transactions involving new technologies or products that favor anonymity.

**Reporting Obligation:** Immediately report any transaction (or attempted transaction), regardless of the amount, that the VASP suspects to be related to money laundering, terrorist financing, or proliferation financing.

**No Tipping-Off:** Prohibit the disclosure to the customer or any third party that a suspicious transaction report is being or has been made, or that an AML/CFT investigation is being conducted.

**Reporting Timeline:** Reports must typically be made as soon as suspicion is formed, without delay.

**Transaction Records:** All necessary records regarding domestic and international transactions, sufficient to reconstruct individual transactions.

**Customer Identification Data:** Copies of all identification documents, account files, and business correspondence.

**CDD Analysis:** Documentation of all analyses undertaken regarding CDD, including the rationale for risk assessments.

**Retention Period:** Records must be retained for at least **five (5) years** after the business relationship ends or after the date of an occasional transaction. These records must be readily available to competent authorities upon request.

**Unidade de Informação Financeira (UIF) – Financial Intelligence Unit:**

**Role:** The UIF is the central national authority responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other financial intelligence to competent authorities for investigation and prosecution of money laundering, terrorist financing, and proliferation financing.

**Banco de Cabo Verde (BCV) – Central Bank of Cabo Verde:**

**Role:** The BCV is the supervisory authority for the financial sector. It is responsible for licensing, regulating, and supervising financial institutions, including banks, payment service providers, and potentially VASPs if they are brought explicitly under its regulatory purview (e.g., through specific VASP licensing frameworks). The BCV issues prudential regulations and conducts inspections to ensure compliance with AML/CFT obligations.

**Evolving Landscape:** The regulatory landscape for virtual assets is constantly evolving globally. While specific VASP licensing frameworks might not yet be fully formalized in Cabo Verde, VASPs are strongly advised to adhere to the existing general AML/CFT framework and follow FATF recommendations.

**Proactive Engagement:** VASPs should proactively engage with the BCV and UIF to understand current expectations and any forthcoming guidance or regulations.

**Legal Advice:** It is highly recommended for any VASP operating or planning to operate in Cabo Verde to seek independent legal advice from a local expert specializing in financial regulation to ensure full compliance with current and future requirements.

**Decree-Law No. 4/2020 of January 27, 2020** (Lei n.º 4/2020 de 27 de Janeiro) – *Regime de Prevenção e Combate ao Branqueamento de Capitais e ao Financiamento do Terrorismo (AML/CFT Law)*.

This law defines "virtual assets" and "Virtual Asset Service Providers (VASPs)" and subjects them to the same AML/CFT obligations as traditional financial institutions.

It mandates customer due diligence (CDD), suspicious transaction reporting (STR), record-keeping, and compliance with international sanctions.

**Legal Reference:** While a direct public URL for the *Boletim Oficial* can be challenging for older decrees, the law is officially published in **Boletim Oficial n.º 4, I Série, de 27 de janeiro de 2020**. The Banco de Cabo Verde (BCV) is the primary regulator and refers to this law.

**Reference Point (BCV Legal Framework):** Banco de Cabo Verde – Quadro Legal (Portuguese).

URL: https://www.bcv.cv/pt/publicacoes/Pages/quadro-legal.aspx (This page lists relevant legislation, including the AML/CFT law).

Cabo Verde, as a member state of the United Nations, is legally bound to implement the sanctions regimes adopted by the UN Security Council (UNSC).

Decree-Law No. 4/2020 obligates reporting entities (including VASPs) to comply with international obligations to combat terrorist financing, which includes implementing UNSC resolutions on asset freezes and prohibitions against designated individuals and entities.

VASPs must screen their customers and transactions against the **UN Security Council Consolidated List** (individuals and entities subject to asset freeze, travel ban, and arms embargoes).

**Legal Reference (UN Sanctions):** United Nations Security Council Sanctions Committees

While OFAC sanctions are not directly *Cabo Verdean law*, any VASP (regardless of location) that engages in transactions involving U.S. persons, U.S. dollar denominated transactions, or that has a U.S. nexus (e.g., using U.S.-based blockchain analytics tools, or U.S. payment rails) falls under OFAC's jurisdiction.

Cabo Verdean VASPs dealing with international partners or using widely adopted stablecoins (like USDT, USDC, which are USD-pegged) must de facto implement OFAC compliance measures to avoid secondary sanctions or being cut off from crucial financial infrastructure.

This requires screening against the **OFAC Specially Designated Nationals (SDN) and Blocked Persons List** and other OFAC sanctions lists.

**Legal Reference (OFAC):** U.S. Department of the Treasury – Office of Foreign Assets Control (OFAC)

Similar to OFAC, EU sanctions are not directly *Cabo Verdean law*. However, due to close ties with Europe, and if a VASP has any nexus to the EU (e.g., EU-based customers, partners, or operations), it would be subject to EU sanctions extraterritorial reach.

Compliance involves screening against the **EU Consolidated List of persons, groups and entities subject to EU financial sanctions**.

**Legal Reference (EU Sanctions):** European Union Sanctions Map

**Conduct Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD):** This includes identifying and verifying customers' identities and beneficial owners.

**Screen against Sanctions Lists:** Regularly screen all customers, beneficial owners, and transactional parties against relevant national and international sanctions lists (UN, OFAC, EU). This must be done at onboarding and on an ongoing basis.

**Identify Politically Exposed Persons (PEPs):** Apply enhanced scrutiny to transactions involving PEPs, as they carry higher corruption and illicit finance risks.

**Monitor Transactions:** Implement systems to monitor transactions for suspicious activity, including attempts to circumvent sanctions.

**Report Suspicious Transactions:** Immediately report any transactions involving sanctioned individuals or entities, or any attempt to evade sanctions, to the **Unidade de Informação Financeira (UIF)** – Cabo Verde's Financial Intelligence Unit.

**Legal Reference (UIF):** Unidade de Informação Financeira (UIF)

URL: https://www.uif.cv/ (Their website details their role and reporting obligations).

**Restricted Jurisdictions:** Transactions involving individuals or entities located in, or associated with, countries subject to comprehensive UN, OFAC, or EU sanctions (e.g., Iran, North Korea, Syria, Cuba, certain regions of Ukraine/Russia) would typically be prohibited or severely restricted.

**High-Risk Jurisdictions:** While not outright prohibited, transactions with jurisdictions identified by the FATF or other international bodies as high-risk for AML/CFT deficiencies may require enhanced due diligence.

**Legal Reference (FATF High-Risk Jurisdictions):** FATF - High-Risk Jurisdictions subject to a Call for Action

**Administrative Fines:** Significant monetary penalties can be imposed by the Banco de Cabo Verde or the UIF.

**Criminal Sanctions:** Individuals involved in money laundering or terrorist financing, or serious breaches of AML/CFT laws, can face imprisonment.

**License Revocation:** VASPs failing to comply may have their licenses or authorizations revoked by the regulatory authorities.

**Reputational Damage:** Non-compliance can lead to severe reputational harm, loss of business, and difficulties in accessing banking and other financial services.

**Extraterritorial Penalties:** For breaches of OFAC or EU sanctions, relevant entities or individuals could face penalties directly from U.S. or EU authorities, even if not physically located in those jurisdictions, if there's sufficient nexus.

**UN Security Council Consolidated List:** This is the primary list that Cabo Verdean law directly mandates compliance with for asset freezes related to terrorism and proliferation.

**OFAC SDN List and other OFAC lists:** Essential for any VASP dealing in USD or with a U.S. nexus.

**EU Consolidated List:** Important for VASPs with an EU nexus.

**No specific "crypto custody license" currently exists.**

However, any entity providing services that involve holding or managing financial assets, even digital ones, could potentially be deemed to be operating within the scope of existing financial services laws and regulations. This might necessitate obtaining a general financial services license or authorization from the **Banco de Cabo Verde (BCV)** if their activities are interpreted to fall under the definition of banking, investment services, or payment services.

Entities offering services involving fiat currency exchange or payment processing related to digital assets would likely fall under existing payment services regulations.

**Segregation of Client Assets Rules:**

While there are no specific crypto-custody segregation rules, the **general principles of financial prudency and client protection** applicable to traditional financial institutions in Cabo Verde would likely require segregation of client funds/assets from the operational capital of the service provider. This is a fundamental principle to prevent misuse of client assets and protect them in case of insolvency.

References would be found in the general banking and financial system laws and prudential regulations issued by the BCV.

**No specific insurance or bonding requirements for crypto custody.**

General financial institutions in Cabo Verde are subject to capital adequacy requirements set by the BCV to ensure their financial stability. These requirements are not specific to digital assets but are designed to provide a buffer against financial risks.

It's unlikely that dedicated insurance for crypto asset loss (e.g., from cyberattacks or theft) is mandated without a specific regulatory framework for crypto custody.

**There are no specific mandates for cold storage of digital assets.**

Such technical requirements are typically found in highly developed, dedicated crypto regulatory frameworks. Without specific legislation, the operational security measures (including hot/cold storage) would be left to the discretion of the service provider, guided by general best practices in the crypto industry.

**No specific definition of a "qualified crypto custodian."**

While there have been discussions and explorations by the Cabo Verdean government and the BCV regarding blockchain technology and digital currencies (including the possibility of a central bank digital currency), **there is no publicly available, comprehensive draft legislation specifically addressing digital asset custody.**

The most likely initial regulatory step would be the inclusion of Virtual Asset Service Providers (VASPs) within the scope of the country's Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) framework, aligning with recommendations from the Financial Action Task Force (FATF). This would impose registration, KYC/CDD, transaction monitoring, and reporting obligations on entities dealing with virtual assets.

**Banco de Cabo Verde (BCV) - Official Website:** This is the central source for all financial regulations in Cabo Verde. You would need to consult the laws and regulations related to banking, financial institutions, and payment services.

**AML/CFT Legislation:** Cabo Verde has a national framework for Anti-Money Laundering and Combating the Financing of Terrorism. While the primary law might not explicitly mention "virtual assets" in older versions, newer amendments or interpretations might bring VASPs under its purview.

An example of a general AML law (you'd need to verify the most current and its scope):

**Lei nº 36/IX/2019 de 21 de Novembro** (Lei sobre Prevenção e Combate ao Branqueamento de Capitais e Financiamento do Terrorismo) - *You would need to find the official publication of this law, likely on the BCV website or the national legislative database, and review its scope regarding "virtual assets" or "new financial technologies."* A direct URL to the law's text is usually embedded within government legislative portals rather than a general regulator's site.

**Primary Regulator:** The **Banco de Cabo Verde (BCV)** is the central bank and the main authority responsible for overseeing financial institutions and monetary policy. It is also the most likely body to address issues related to virtual assets and cryptocurrencies from a financial stability and consumer protection perspective.

**Regulatory Stance and Warnings (General "Actions"):**

**Regulator:** Banco de Cabo Verde (BCV)

**Entity Targeted:** General public, financial institutions

**Violation Type:** Prevention of illegal financial activities, consumer protection against risks associated with unregulated virtual assets, general warnings against the use of cryptocurrencies due to their volatility, lack of regulation, and potential for fraud/money laundering.

**Penalty Amount:** Not applicable, as these are warnings, not specific enforcement actions against an entity.

**Date:** Multiple instances, typically over the past few years. A significant warning was issued in **late 2021/early 2022** and reiterated since.

**Outcome:** Increased public awareness, deterring regulated financial institutions from dealing directly with unregulated crypto assets. The BCV has consistently advised caution.

A common approach from central banks in developing economies is to issue warnings via local press. For example, local news outlets often report on BCV warnings:

**Issuing warnings** to the public about the risks of unregulated virtual assets.

**Developing a regulatory framework** for virtual assets, which is a process that typically precedes widespread enforcement.

Any cases of fraud involving cryptocurrencies would likely be handled under **general criminal law** by the police and judicial system, rather than specific crypto-related enforcement by a financial regulator, especially if dedicated virtual asset laws are still nascent. These types of criminal cases are often not widely reported internationally with the specific details requested.