Remote VASP serving residents in Maldives

Exchanges (Crypto-to-Crypto or Crypto-to-Fiat):

Pure Crypto-to-Crypto: Currently, there is no specific license required from the MMA for a platform exclusively facilitating crypto-to-crypto trades. However, such entities would still be subject to general AML/CFT obligations if identified as VASPs under Maldivian law.

Crypto-to-Fiat (or Fiat-to-Crypto): If an exchange involves the exchange of fiat currency (Maldivian Rufiyaa - MVR or other fiat currencies) for virtual assets, or vice-versa, it could potentially fall under existing financial services regulations, such as those for money services businesses or payment service providers. This would require an appropriate license from the MMA for those traditional activities. The scope of these existing licenses might need to be interpreted or expanded to explicitly cover VA activities.

Local Presence: For any financial service that requires an MMA license (e.g., payment services), a physical local presence, typically in the form of a locally incorporated entity and local management, is usually mandatory. For purely crypto-related activities without a specific license, a local presence might not be legally mandated but is generally advisable for effective AML/CFT compliance and to engage with regulators.

AML/KYC (Anti-Money Laundering / Know Your Customer): This is the most crucial requirement for any entity dealing with virtual assets in the Maldives, regardless of licensing. VASPs are expected to:

Report suspicious transactions (STRs) to the Financial Intelligence Unit (FIU) of the Maldives Monetary Authority.

Appoint an AML Compliance Officer.

Adhere to the "Travel Rule" as per FATF guidance.

Prevention of Money Laundering and Financing of Terrorism Act (No. 10/2014): This is the core AML/CFT legislation in the Maldives. VASPs, even without specific licensing, are expected to comply with its provisions.

Capital Requirements: There are no specific capital requirements for VASPs as VASPs yet. However, if a business falls under an existing financial license (e.g., payment service provider, money service business), then the capital requirements for that specific license would apply.

VASP Registration/Licensing: However, entities providing custodial services for virtual assets would likely fall under the definition of a Virtual Asset Service Provider (VASP) as defined by the AML/CFT Act and subsequent regulations. VASPs are subject to AML/CFT obligations and may require registration or licensing with the MMA/FIU.

Threshold: Transactions equal to or greater than MVR 15,000 (Maldivian Rufiyaa) or its equivalent in USD 1,000.

Collection of Required Information: For any VA transfer equal to or exceeding the threshold, VASPs must obtain and hold the following accurate and meaningful information:

Transmission of Information: The originator VASP must transmit the required information to the beneficiary VASP immediately and securely with the VA transfer.

Secure Record-Keeping: VASPs must maintain records of all collected information for at least five years, and these records must be readily available to the MMA or FIU upon request.

Reporting: VASPs are required to file Suspicious Transaction Reports (STRs) to the Financial Intelligence Unit (FIU) in cases where they suspect money laundering or terrorist financing, regardless of the transaction amount.

MMA's Consistent Position: The Maldives Monetary Authority has repeatedly stated that cryptocurrencies are not recognized as legal tender in the Maldives. They also do not provide licenses or regulatory oversight for any cryptocurrency-related activities or businesses operating within the country.

Public Advisories: The MMA has issued warnings to the public about the inherent risks of cryptocurrencies, including price volatility, cybersecurity risks, potential for fraud, and the absence of consumer protection. These advisories are the primary "action" taken by the regulator concerning crypto.

Lack of Licensed Entities: Since no crypto businesses are licensed by the MMA, there are no regulated entities for the MMA to "enforce" against in the traditional sense (e.g., for non-compliance with licensing conditions or specific crypto-related regulations). Any potential criminal activity involving crypto would fall under general criminal law enforcement by the police, rather than specific financial regulatory enforcement.

Focus on AML/CFT: While there isn't a specific crypto regulatory framework, the Maldives, as a member of the Asia/Pacific Group on Money Laundering (APG), is working to strengthen its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regime. This includes addressing virtual assets in line with FATF recommendations, but this is more about developing future regulations rather than current enforcement actions against existing crypto businesses.