Self-custodial wallet / non-custodial software in Seychelles
Publisher of software where users hold their own private keys. The publisher never holds, controls, or has access to user funds.
Self-custodial wallet is conditionally permitted in Seychelles without local incorporation, subject to AML obligations and none licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- No
- Licensing burden
- None
- Last updated
- 2026-07-13
AML Obligations
- No AML obligations attach to the publisher of self-custodial, non-custodial wallet software, because the publisher never holds, controls, or has access to user funds and therefore does not meet the definition of a VASP under the VASP Act 2022.
- The VASP Act 2022 defines VASP activities as including exchange between virtual assets and fiat currencies, exchange between virtual assets, transfer of virtual assets, safekeeping/administration of virtual assets or instruments enabling control over virtual assets, and participation in financial services related to an issuer's offer/sale of a virtual asset (sc.aml.exchange-between-virtual-assets-and, sc.aml.exchange-between-one-or-more, sc.aml.transfer-of-virtual-assets, sc.aml.safekeeping-andor-administration-of-virtual, sc.aml.participation-in-and-provision-of). None of these activities are performed by a non-custodial wallet software publisher.
- Seychelles AML/CFT Act 2020 obligations apply only to designated non-financial businesses and professions (DNFBPs) and financial institutions, which explicitly include VASPs (sc.aml.anti-money-laundering-and-countering-the). A non-custodial wallet publisher is not a VASP, so no CDD, EDD, STR, or record-keeping obligations attach.
Key Restrictions
- The software must be genuinely non-custodial: the publisher must never hold, control, or have access to user private keys or funds. Any feature enabling the publisher to transfer, hold, or administer user virtual assets would trigger VASP licensing requirements.
- If the wallet software incorporates any integrated on-ramp/off-ramp, exchange, or staking service where the publisher exercises custody or control, the publisher would need a VASP license from the FSA (sc.custody.requirement-for-license-any-person).
- The wallet must not offer security tokens (shares, debentures, units in collective investment schemes, or investment contracts meeting the four-part test) as such offerings may trigger securities regulation (sc.licensing.security-tokens-these-are-tokens, sc.licensing.shares-representing-equity-ownership-in, sc.licensing.debenturesbonds-representing-a-debt-owed, sc.licensing.units-in-a-collective-investment, sc.licensing.other-investment-contracts-any-token).
Key Risks
- Regulatory ambiguity risk: The FSA may take an expansive view of what constitutes 'instruments enabling control over virtual assets' (sc.aml.safekeeping-andor-administration-of-virtual), potentially classifying software that generates private keys on user devices as providing such instruments.
- Enforcement exposure: The FSA has a track record of issuing public warnings and cease-and-desist orders against unlicensed operators (sc.licensing.issuing-public-warnings-against-entities, sc.licensing.cease-and-desist-orders-mandating, sc.licensing.enforcement-type-public-warning-cease). A non-custodial wallet publisher could face scrutiny if the FSA reinterprets the regulatory perimeter.
- Reputational risk: Seychelles is a small jurisdiction with limited crypto-specific enforcement precedent; FSA guidance on non-custodial software is not expressly published, creating uncertainty for operators.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Virtual Asset Service Providers Act, 2022 (VASP Act 2022): This is the cornerstone legislation specifically regulating VASPs. It mandates licensing, registration, and compliance with AML/CFT obligations for entities engaged in virtual asset services.
Exchange between virtual assets and fiat currencies.
Exchange between one or more forms of virtual assets.
Safekeeping and/or administration of virtual assets or instruments enabling control over virtual assets.
Participation in and provision of financial services related to an issuer’s offer and/or sale of a virtual asset.
Anti-Money Laundering and Countering the Financing of Terrorism Act, 2020 (AML/CFT Act 2020): This is the overarching AML/CFT legislation in Seychelles, applying to all designated non-financial businesses and professions (DNFBPs) and financial institutions, which now explicitly includes VASPs. The VASP Act builds upon and references the requirements of this broader AML/CFT Act.
Requirement for License: Any person providing "custody or administration of virtual assets or instruments enabling control over virtual assets" as a business in or from Seychelles must obtain a VASP license from the FSA.
Issuing Public Warnings: Against entities operating without a license or misrepresenting their licensing status in Seychelles, often encompassing investment schemes, forex, and implicitly, crypto-related activities.
Cease and Desist Orders: Mandating unauthorized entities to stop operations.
Enforcement Type: Public Warning & Cease and Desist (against Unlicensed Operation)
Security Tokens: These are tokens designed from the outset to represent traditional securities such as:
Shares: Representing equity ownership in a company (e.g., with voting rights, dividend entitlement).
Debentures/Bonds: Representing a debt owed by the issuer (e.g., with interest payments).
Units in a Collective Investment Scheme: Representing an interest in a fund or pool of assets managed by others.
Other Investment Contracts: Any token structure that meets the four criteria of the Howey-like test, implying an investment with an expectation of profit based on the efforts of others. This includes tokens offering profit-sharing, revenue rights, or other economic benefits linked to the issuer's performance.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a publisher of genuinely non-custodial wallet software (no access to user keys or funds) is not captured by Seychelles' VASP licensing regime and faces no AML obligations, but must ensure no incidental custody or security-token functions are introduced, as clear FSA guidance on non-custodial software is absent.
Questions this verdict aims to answer
- Does software publishing trigger VASP / MSB classification?
- Do AML obligations attach when no custody exists?
- What disclosure or consumer-protection rules apply?