Remote VASP serving residents 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.

Bank of Sierra Leone (BSL): As the central bank, the BSL is the primary institution that has issued official statements and warnings regarding cryptocurrencies due to their implications for monetary policy, financial stability, and consumer protection.

Partial/Cautionary/Warning-Based: Sierra Leone does not have a comprehensive regulatory framework for virtual assets. Instead, the approach is primarily characterized by warnings from the central bank, emphasizing the risks associated with cryptocurrencies and stating they are not legal tender. There is no official recognition, licensing, or specific regulation for crypto service providers.

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:

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.

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.

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.

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.