Centralized exchange in Sierra Leone

No Specific License: There are currently no specific licenses in Sierra Leone for cryptocurrency custodians or digital asset service providers. Entities engaging in such activities operate in a largely unregulated space regarding specific crypto custody requirements.

BSL Warnings: The Bank of Sierra Leone has repeatedly issued warnings to the public about the risks of investing in or transacting with cryptocurrencies, stating that they are not legal tender and are not regulated by the BSL. This implies that any entity offering crypto custody services would be operating outside the formal regulatory perimeter.

No Specific Rules: Given the absence of a dedicated regulatory framework for crypto custody, there are no specific rules mandating the segregation of client digital assets from the custodian's own assets.

No Specific Mandates: There are no legal mandates requiring cryptocurrency custodians to use cold storage for digital assets.

No Specific Definition: Sierra Leone does not have a legal or regulatory definition for a "qualified custodian" in the context of digital assets or cryptocurrencies.

Anti-Money Laundering and Combating of Terrorist Financing Act, 2012 (or latest iteration): This act and its subsequent amendments would generally apply to financial institutions and designated non-financial businesses and professions. If virtual asset service providers (VASPs) are eventually classified under this act, they would be subject to customer due diligence (CDD), record-keeping, and suspicious transaction reporting (STR) obligations.

Financial Intelligence Unit of Sierra Leone (FIU-SL): While not specifically regulating crypto, the FIU-SL is responsible for combating money laundering and terrorist financing (AML/CFT). Any engagement with virtual assets by financial institutions or designated non-financial businesses and professions (DNFBPs) would fall under their purview for AML/CFT compliance, even without specific crypto legislation.

The Anti-Money Laundering and Combating of Financing of Terrorism Act, 2018: While an online copy with a direct, stable URL is not readily available through general government searches, this Act is the primary domestic legislation for AML/CFT in Sierra Leone. It would be accessible via legal databases or directly from the Bank of Sierra Leone (BSL) or the Financial Intelligence Unit – Sierra Leone (FIU-SL).

Identification and Verification of Customer Identity:

For natural persons: Name, address, date of birth, nationality, unique identification number (e.g., national ID, passport). Verification through reliable, independent source documents, data, or information.

For legal persons/arrangements: Name, legal form, proof of existence, powers that regulate and bind the legal person, and identification of persons holding senior management positions.

Identification of Beneficial Owners: Take reasonable measures to understand the ownership and control structure of the customer and identify the ultimate natural person(s) who own or control the customer.

Purpose and Nature of Business Relationship: Understand the purpose and intended nature of the business relationship or occasional transaction.

Ongoing Monitoring: Conduct ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions are consistent with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds or wealth.

Risk-Based Approach: Apply enhanced CDD for higher-risk customers or transactions (e.g., Politically Exposed Persons (PEPs), cross-border correspondent relationships, complex structures, high-value transactions, or transactions involving jurisdictions with weak AML/CFT regimes). Conversely, simplified CDD may be applied for lower-risk scenarios.

Source of Funds and Source of Wealth: For higher-risk customers or transactions, VASPs are expected to take reasonable measures to establish the source of funds and source of wealth involved.

Obligation: Any VASP that has reasonable grounds to suspect that funds or assets (including virtual assets) are the proceeds of a criminal activity or are related to terrorist financing must promptly report its suspicions to the FIU-SL.

No Tipping-Off: VASPs and their employees are prohibited from disclosing to the customer or any third party that a STR is being, or has been, submitted.

Transaction Records: Records of all transactions, domestic and international, for a minimum period of five (5) years. These records must be sufficient to permit reconstruction of individual transactions and patterns of transactions.

Customer Identification Data: Records of the information obtained through the CDD process (e.g., identity documents, beneficial ownership information) for a minimum period of five (5) years after the business relationship has ended or after the date of an occasional transaction.

Records of Analysis: Records of the analysis undertaken in respect of complex, unusual, or high-risk transactions.

The Financial Intelligence Unit of Sierra Leone (FIU-SL)

Compliance Requirement: UN Security Council resolutions imposing sanctions are legally binding on all UN member states, including Sierra Leone. Sierra Leone incorporates these obligations into its domestic law, primarily through its anti-money laundering and combating the financing of terrorism framework.

VASP Obligations: Any VASP operating in or from Sierra Leone must screen its customers and transactions against the UN Consolidated Sanctions List and specific UN Security Council Committee Sanctions Lists. Assets of listed individuals/entities must be frozen without delay, and any attempt to circumvent these measures must be reported.

Not explicitly adopted or fully implemented through specific legislation targeting VASPs and the Travel Rule.

While Sierra Leone has a foundational AML/CFT law, the Anti-Money Laundering and Combating of Terrorist Financing Act, 2019, this act does not explicitly define "Virtual Assets" or "Virtual Asset Service Providers" in a way that would trigger the specific requirements of the Travel Rule.

GIABA's Mutual Evaluation Reports and subsequent follow-up reports on Sierra Leone have consistently highlighted deficiencies in addressing new technologies and products, including virtual assets, indicating a lack of comprehensive regulatory and supervisory framework for VASPs. As of the latest public reports, Recommendation 15 (New Technologies) is typically rated as "Partially Compliant" or "Non-Compliant" for Sierra Leone, specifically due to the absence of a legal and regulatory framework to supervise VASPs and implement the Travel Rule.

There is no specific effective date for the FATF Travel Rule in Sierra Leone because dedicated legislation for it has not been enacted.

No specific threshold amounts have been legislated for the Travel Rule in Sierra Leone, as the rule itself is not formally adopted.

No specific categories of VASPs are explicitly covered under a VASP-specific regulatory framework in Sierra Leone.

If adopted, VASPs would typically need to implement solutions to collect, store, and transmit required originator and beneficiary information (name, account number/wallet address, physical address, national identity number, etc.) securely and in real-time or near real-time.

There are no direct penalties for non-compliance with the FATF Travel Rule in Sierra Leone, as the rule is not explicitly legislated.

However, if an entity operating in Sierra Leone facilitates illicit financial activities (e.g., money laundering, terrorist financing) using virtual assets, they would be subject to the penalties outlined in the Anti-Money Laundering and Combating of Terrorist Financing Act, 2019, and potentially other criminal statutes. These penalties can include significant fines and imprisonment.