Custodial wallet / SaaS in Grenada

Grenada Financial Services Authority (FSA): The competent authority responsible for licensing, supervision, and enforcement of the Virtual Asset Business Act.

Grenada Financial Intelligence Unit (FIU): Responsible for anti-money laundering and combating the financing of terrorism (AML/CFT) supervision of virtual asset businesses.

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.

This explicitly covers virtual asset custodianship services.

An applicant must be a company incorporated or established in Grenada. This requires a legal entity registered within the jurisdiction.

While the Act does not explicitly mandate all directors or senior officers to be Grenadian residents, it does require that the applicant "has directors or senior officers that are ordinarily resident in Grenada or other arrangements in respect of directors or senior officers that the Authority considers appropriate." This indicates a strong preference for or requirement of local management or significant operational presence.

Fit and Proper Test:

The Act mandates that a licensee must, at all times, maintain sufficient capital to carry on its virtual asset business.

The specific minimum capital requirements are to be prescribed by the Authority (FSA) through regulations or directives. Applicants should consult the FSA directly or its published guidelines for the exact amounts, which may vary depending on the scope of activities.

Virtual asset businesses are designated as "reporting entities" under Grenada's Proceeds of Crime Act and other AML/CFT legislation.

Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures (Know Your Customer - KYC).

Risk-based approach to assessing and mitigating money laundering and terrorism financing risks.

Record-keeping of transactions and customer identification data.

Monitoring of transactions for suspicious activities.

Reporting of suspicious transactions (STRs) to the FIU.

Appointment of a designated AML/CFT Compliance Officer.

Ongoing training for employees.

VASP Definition: The FIU's guidance defines a VASP consistent with FATF recommendations, which includes any natural or legal person who, as a business, conducts one or more of the following activities for or on behalf of another natural or legal person:

Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets. (This explicitly covers custody.)

Registration/Notification: VASPs are generally required to register with the FIU and/or notify the FIU of their operations, ensuring compliance with AML/CFT obligations. This is not a specific "license" but a requirement to operate legally under the AML/CFT regime.

Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) for high-risk customers.

Monitoring of transactions.

Suspicious Transaction Reporting (STR) to the FIU.

Appointment of a Compliance Officer.

Ongoing staff training.

Risk assessment frameworks.

Not explicitly detailed in VASP AML/CFT Guidance: While general AML/CFT guidance focuses on identifying clients, monitoring transactions, and reporting, it typically does not go into the specifics of prudential requirements like asset segregation.

Implied Best Practice: Reputable custodians, regardless of explicit regulatory mandate, typically segregate client assets from their operational funds as a matter of good governance, security, and to protect client interests in case of insolvency. However, there is no specific Grenadian regulation mandating this for crypto custodians under the current AML/CFT framework.

No explicit mandate: Grenada's current AML/CFT framework for VASPs does not explicitly require custodians to carry specific insurance or bonding to cover potential losses of client digital assets.

Virtual Asset Business Act (VABA), 2020: This Act provides the framework for the regulation of virtual asset businesses in Grenada, requiring them to be licensed by GARFIN and comply with AML/CFT requirements.

Require Registration/Licensing: All entities operating as Virtual Asset Service Providers (VASPs) in Grenada are legally required to be licensed by GARFIN and comply with AML/CFT regulations enforced by both GARFIN and the FIU.

Such actions have not occurred at a level deemed "significant" for public reporting.

Any enforcement has been handled privately, or through warnings and cease-and-desist orders without public financial penalties.

The focus has primarily been on establishing and implementing the regulatory framework rather than major punitive actions against specific entities being publicly announced.