Cabo Verde -- Regulatory Status Regulatory Overview

Cabo Verde (Cape Verde), like many smaller island nations, has adopted a cautious and largely non-permissive stance on virtual assets, primarily driven by its central bank, the Banco de Cabo Verde (BCV). While not a full ban on holding virtual assets, it prohibits their use as legal tender and operating unregulated virtual asset services.

Here's a breakdown of the current regulatory status:

Regulatory Approach

• Partial/Cautionary Ban with AML/CFT Oversight: Cabo Verde does not recognize cryptocurrencies as legal tender and has issued strong warnings against their use and the operation of unregulated virtual asset services. There is no comprehensive regulatory framework specifically for virtual assets, but existing Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) legislation is expected to apply to any financial activity involving virtual assets that falls within its scope.

Primary Regulatory Bodies

1. Banco de Cabo Verde (BCV):

   • Role: The central bank is the primary regulator for monetary policy, financial stability, and supervision of the banking sector. It has taken the lead in issuing warnings and clarifying the non-legal tender status of cryptocurrencies.
   • URL: Banco de Cabo Verde

2. Unidade de Informação Financeira (UIF) / Financial Intelligence Unit (FIU):

   • Role: Responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) related to money laundering and terrorist financing. Any virtual asset activity that falls under AML/CFT scrutiny would involve the UIF.
   • Note: The UIF operates under the Ministry of Finance. Direct public portal for general information may be limited, but its function is crucial for AML/CFT enforcement.

3. Autoridade Reguladora Multissectorial da Economia (ARME):

   • Role: While not directly focused on financial virtual assets, ARME regulates various economic sectors, including telecommunications and competition. If virtual asset services touch upon these areas (e.g., related to online platforms, consumer protection in a broader sense), ARME might have an indirect role.
   • URL: ARME

Key Legislation Names and Dates

Cabo Verde currently lacks a specific, comprehensive law dedicated to the regulation of virtual assets. The current stance is primarily shaped by:

1. BCV Communiqué (e.g., N.º 01/2018):

   • Name: Comunicado N.º 01/2018 – Alerta sobre moedas virtuais ou criptomoedas (Communiqué No. 01/2018 – Alert on virtual currencies or cryptocurrencies)
   • Date: Issued around March 2018 (specific date may vary slightly depending on publication).
   • Key Provisions: This communiqué explicitly states that cryptocurrencies are not legal tender in Cabo Verde. It warns the public about the high risks associated with them (volatility, lack of regulation, potential for fraud, absence of consumer protection, money laundering risks), and clarifies that the BCV does not supervise or license entities dealing with virtual assets. It advises against their use for payments or investment.
   • URL: While direct links to older communiqués can be hard to find on BCV's evolving site, references are widely available. You can often find it by navigating to BCV's press/communiqués section or searching on their site. An example reference to its content can be found in various news reports or financial sector overviews.
     • General BCV Press Section (for searching): BCV - Comunicados e Publicações (You may need to search archives on this page).

2. Law N.º 11/IX/2018, of December 24 (AML/CFT Law):

   • Name: Lei N.º 11/IX/2018, de 24 de dezembro – Regime jurídico de prevenção e combate ao branqueamento de capitais e ao financiamento do terrorismo (Legal regime for the prevention and combat of money laundering and terrorist financing).
   • Date: December 24, 2018.
   • Key Provisions: This is the general Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) law in Cabo Verde, updated to align with international standards (e.g., FATF recommendations). While it may not explicitly define "virtual assets" as designated non-financial businesses and professions (DNFBPs), financial institutions subject to this law would generally be expected to apply due diligence and reporting requirements to any transactions that could involve virtual assets and are deemed suspicious or fall within the scope of "funds" or "assets" being laundered. Any entity operating within Cabo Verde that facilitates virtual asset transactions (even if not specifically licensed for crypto) would likely face scrutiny under this law regarding illicit activities.
   • URL: You can typically find this law on the official government gazette (Boletim Oficial) website or through legal databases.
     • General reference point (example): Conselho Superior da Magistratura Judicial - Lei N.º 11/IX/2018

Current Stance on Crypto Trading and Exchanges

• No Legal Tender Status: Cryptocurrencies are explicitly not recognized as legal tender for payments in Cabo Verde.
• Unregulated Environment for Trading Platforms: There is no specific regulatory framework or licensing regime for virtual asset trading platforms or exchanges operating in Cabo Verde. This means that such entities operate in an unregulated space, without oversight from the BCV or other financial regulators regarding their operations, consumer protection, or capital requirements.
• High Risk and Warnings: The BCV consistently warns the public about the high risks associated with investing in or trading cryptocurrencies, including extreme price volatility, potential for fraud, cyber security risks, and the complete absence of investor protection or recourse.
• AML/CFT Application (Implied): While not explicitly regulated for their crypto nature, any financial activity related to virtual assets that involves a Cabo Verdean entity (e.g., bank transfers to/from crypto exchanges, or local money service businesses facilitating crypto-related payments) would likely fall under the existing AML/CFT obligations enforced by the BCV and the UIF.
• No Specific Ban on Ownership (but discouraged): While the operation of unregulated exchanges is not sanctioned and their use as currency is prohibited, there is no explicit ban on individuals owning or holding cryptocurrencies obtained from international platforms. However, the official stance strongly discourages engagement due to the associated risks and lack of regulatory protection.

In summary, Cabo Verde maintains a highly cautious approach to virtual assets, emphasizing their non-legal tender status and the associated risks, with no dedicated comprehensive regulatory framework for the sector. Existing AML/CFT laws provide a baseline for combating illicit financial activities, but a clear path for regulated virtual asset businesses is not yet established.