Sao Tome and Principe

**Neither a dedicated Registration nor Licensing Regime for VASPs:** As of the latest information, STP does not have a specific regime for registering or licensing virtual asset service providers.

**Implication:** Companies operating solely with crypto-to-crypto transactions might operate in a regulatory grey area from a specific licensing perspective. However, any interaction with traditional fiat currency or the broader financial system would likely bring them under the purview of existing financial regulations.

**Cryptocurrency Exchanges (especially those dealing with fiat):**

Pure crypto-to-crypto exchanges might not require a specific license *yet*, but they would still be subject to AML/CFT obligations if they deal with "funds" or "assets" in a broad sense.

**Custody Providers (holding virtual assets):**

If a custody provider holds virtual assets on behalf of clients, especially if these assets are considered "funds" or "property" under existing laws, they might fall under broader financial services regulations. There is no specific "crypto custody" license. Depending on the nature of the assets and the services, they might potentially be seen as requiring an **investment services license** or, in some interpretations, even a form of **banking license** if they hold significant client assets.

**Payment Processors (processing crypto payments or crypto-related fiat payments):**

Entities that process payments where virtual assets are involved, particularly if they facilitate the conversion to or from fiat currency, or integrate into the traditional payment infrastructure, are highly likely to be subject to the **payment services legislation** regulated by the BCSTP. This would require a **payment service provider license**.

**Capital Requirements:** Specific minimum capital requirements would apply as per the regulations for the particular financial license sought (e.g., for banks, payment institutions). These are not crypto-specific but general financial institution requirements.

**AML/KYC (Anti-Money Laundering/Know Your Customer):** This is the **most crucial and universally applicable requirement**, even in the absence of specific crypto licensing. STP has AML/CFT legislation in line with international standards (FATF recommendations). Any entity dealing with funds, regardless of their nature (fiat or virtual assets), would be subject to:

Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) procedures.

Suspicious Transaction Reporting (STR) to the Financial Information Unit (FIU) of Sao Tome and Principe.

Internal AML/CFT policies, controls, and training.

**Local Presence:** For any traditional financial license, a significant local presence is typically required, including:

A locally incorporated legal entity.

Local management and staff, including a compliance officer.

Fit and proper assessment for directors and key personnel.

**Initial Consultation:** Informal discussions with the BCSTP.

Organizational structure and governance arrangements.

Resumes and fit-and-proper declarations for directors and senior management.

Comprehensive AML/CFT policies and procedures.

IT and security infrastructure details.

**Review and Due Diligence:** The BCSTP will conduct extensive due diligence on the application, proposed business model, and key personnel.

**Interview(s):** Applicants and key personnel may be required to attend interviews.

**Approval/Rejection:** The BCSTP will issue a decision.

**Operationalization:** Once approved, the entity must meet any pre-commencement conditions before launching operations.

**Lei nº 6/2016, de 22 de Junho - Lei do Combate ao Branqueamento de Capitais e Financiamento do Terrorismo (Law No. 6/2016, June 22 - Law on Combating Money Laundering and Terrorist Financing):**

This is the fundamental AML/CFT law in STP. Any entity involved in financial transactions, including those potentially involving virtual assets, would be subject to its provisions. It mandates customer due diligence, record-keeping, and suspicious transaction reporting.

**Lei do Sistema de Pagamentos (Payment System Law) and associated regulations/circulars:**

Entities offering payment services, including those facilitating crypto-fiat conversions or integrating into traditional payment rails, would fall under this framework, overseen by the BCSTP.

*Specific law number/date may vary, but this refers to the overall framework governing payment service providers.*

**Lei Orgânica do Banco Central de São Tomé e Príncipe (Organic Law of the Central Bank of Sao Tome and Principe):**

This law defines the mandate and powers of the BCSTP as the primary financial regulator.

You would need to navigate this site to look for specific laws, circulars, or pronouncements related to financial services, payments, and any potential guidance on virtual assets. The site is primarily in Portuguese.

**No specific "Howey Test equivalent" for crypto:** There is no publicly available legal framework in Sao Tome and Principe that outlines a specific test (like the Howey test in the US, or the SAFIT/DAFIT in some other jurisdictions) to determine if a crypto token constitutes a security.

The **Commercial Code (Código Comercial)**.

Laws governing the **Financial System (Lei do Sistema Financeiro)**, if a comprehensive one exists, or specific decrees related to capital markets.

**A functional approach:** Regulators would likely examine the economic substance and function of the token, rather than its technological form. If a token grants rights akin to traditional securities (e.g., share of profits, voting rights in an enterprise, a claim on assets, an expectation of profit derived from the efforts of others), it would be more likely to be treated as a security under existing law.

**Investment Tokens (Security Tokens):** Tokens that represent:

Ownership interests in an entity (like shares).

A debt obligation (like bonds).

Units in a collective investment scheme or fund.

A right to a share of future profits or revenue generated by an underlying asset or enterprise.

Any token that gives holders an expectation of profit primarily from the managerial efforts of the issuer or a third party, without providing significant utility or consumption rights.

**Asset-backed Tokens:** Tokens collateralized by traditional assets (real estate, commodities, art) could be considered securities if they represent an investment contract or ownership interest in the underlying asset for profit.

**Pure Payment Cryptocurrencies:** Cryptocurrencies like Bitcoin or Ethereum (if not offered as part of an investment contract) are generally viewed as commodities or assets rather than securities, though they might fall under anti-money laundering (AML) regulations.

**True Utility Tokens:** Tokens providing genuine access to a product or service, where the primary motive for acquisition is consumption rather than investment.

**Stablecoins:** Often viewed as electronic money or payment instruments, subject to e-money regulations rather than securities laws.

**Prospectus Requirements:** Public offerings of securities generally require the publication of a prospectus or offering document approved by the relevant financial authority (likely the BCSTP or Ministry of Finance).

**Licensing:** Issuers, brokers, or financial intermediaries involved in the offering or distribution of securities would typically need to be licensed by the BCSTP or other designated authority.

**No specific crypto exemptions:** It is highly unlikely that there would be any specific exemptions tailored for crypto token offerings, as the regulatory framework for them is not yet developed. Existing exemptions for private placements or small offerings of traditional securities might apply, but this would need to be confirmed with local legal counsel.

**Regulated Markets:** Trading would typically be required to occur on a licensed stock exchange or regulated trading platform, if one exists and is capable of listing such instruments.

**Broker-Dealer Licensing:** Intermediaries facilitating secondary trading would need to be licensed as broker-dealers.

**Market Abuse Rules:** Existing rules against market manipulation, insider trading, and other forms of market abuse would apply.

**Reality:** In practice, without a specific framework, secondary trading of such "security tokens" would likely happen on unregulated global crypto exchanges, presenting significant legal and regulatory risks for local participants.

**No specific publicly reported enforcement actions related to crypto as securities:** As of my last update, there are no publicly available records of specific enforcement actions by Sao Tome and Principe authorities classifying and penalizing crypto offerings as unregistered securities.

**General Warnings:** The BCSTP has, in the past, issued general warnings regarding the risks associated with cryptocurrencies, including volatility, lack of regulation, and potential for fraud. However, these are general consumer protection advisories, not specific regulatory enforcement regarding securities classification.

**Potential for General Financial Crime Enforcement:** In extreme cases of fraud or illicit activity involving crypto, enforcement would likely fall under general criminal law or anti-money laundering (AML) statutes, rather than specific securities violations related to crypto.

**Banco Central de São Tomé e Príncipe (BCSTP):** This is the primary financial regulator. Their website is the place to look for any official statements, warnings, or future regulatory developments regarding cryptocurrencies or financial instruments.

**Legislation Portal (e.g., Diário da República - Official Gazette):** While no direct link to crypto-specific laws is available, any new legislation would be published here. Searching for "Código Comercial," "Lei do Sistema Financeiro," or similar terms might lead to the general laws that would be applied by analogy. Finding an official online portal for all legislation in STP can be challenging for external parties.

**Implicitly Unregulated with Public Warnings:** The approach is not a comprehensive ban, nor is it a supportive or regulated environment. Instead, the central bank has issued public warnings about the risks associated with virtual assets, making it clear they are not legal tender and operate outside of the supervised financial system.

**No Specific Legislation:** There are no specific laws or regulations governing the issuance, trading, or use of cryptocurrencies.

**Banco Central de São Tomé e Príncipe (BCSTP)** (Central Bank of Sao Tome and Principe)

**Aviso N.º 001/2018 do Banco Central de São Tomé e Príncipe (Notice No. 001/2018 of the Central Bank of Sao Tome and Principe)**

**Date:** 21 de Dezembro de 2018 (December 21, 2018)

**Content:** This notice explicitly warns the public about the risks associated with virtual currencies (like Bitcoin). It states that virtual currencies are **not legal tender** in Sao Tome and Principe, are **not issued or guaranteed by the Central Bank**, and that **transactions involving them are not regulated or supervised by the BCSTP**. It highlights the lack of legal protection for users in case of losses.

**URL (Portuguese):** While the Aviso might not have a direct, stable URL on the main BCSTP website (as notices can be archived), it is consistently referenced by financial bodies and local reports. A general search on the BCSTP site for "avisos" or "moedas virtuais" would lead to its presence, or it can be found in various official document repositories.

*Note: Direct links to specific archived notices can be volatile on central bank websites. However, the existence and content of Aviso N.º 001/2018 are widely acknowledged and can be verified through the BCSTP's general publications section if searching for archived press releases/notices.*

**Trading:** Crypto trading is not explicitly illegal, but it operates in a **regulatory grey area** with no official oversight or consumer protection. Individuals engaging in crypto trading do so entirely at their own risk, as the transactions are not regulated by the BCSTP.

**Exchanges:** There is **no licensing regime or regulatory framework** for cryptocurrency exchanges in Sao Tome and Principe. Any exchanges operating there, or being used by residents, do so without local authorization, supervision, or legal recognition from STP financial authorities. Users of such platforms would have no recourse under Sao Tomean financial law in case of disputes, fraud, or loss of assets.

**Lei n.º 10/2012, de 23 de Agosto (Law No. 10/2012, of August 23):** This is the foundational law for the Prevention and Combat of Money Laundering and Terrorism Financing. It establishes the general framework for AML/CFT obligations for financial and non-financial institutions.

**Lei n.º 7/2020, de 16 de Julho (Law No. 7/2020, of July 16):** This law amended and republished Law No. 10/2012. Amendments typically reflect updated FATF recommendations and often broaden the scope of obliged entities or strengthen specific requirements (like beneficial ownership or risk-based approaches), which would implicitly apply to emerging sectors like virtual assets.

**Identification and Verification of Customers:**

For individuals: Obtaining name, address, date of birth, nationality, and a unique identification number (e.g., passport, national ID) and verifying this information using reliable, independent source documents or data.

For legal entities/arrangements: Obtaining name, legal form, proof of existence, powers that regulate and bind the entity, and the names of relevant persons having senior management positions.

**Beneficial Ownership:** Identifying and taking reasonable measures to verify the identity of the beneficial owner(s) of the customer, including natural persons who ultimately own or control the customer, or the natural person on whose behalf a transaction is being conducted.

**Purpose and Intended Nature of the Business Relationship:** Understanding the purpose and intended nature of the business relationship.

**Ongoing Monitoring:** Conducting 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 obliged entity’s knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

**Enhanced Due Diligence (EDD):** Applying enhanced measures for higher-risk customers, relationships, or transactions, such as:

Customers from high-risk jurisdictions identified by FATF or national authorities.

Complex or unusually large transactions.

Transactions with no apparent economic or lawful purpose.

**Simplified Due Diligence (SDD):** Permitted in specific, low-risk circumstances, provided that the obliged entity has determined the relationship or transaction presents a low risk of money laundering or terrorist financing.

**Report Suspicious Transactions:** Report to the Financial Intelligence Unit (UIF) any transaction, attempted transaction, or activity that they know, suspect, or have reasonable grounds to suspect involves funds derived from criminal activity or is related to terrorism financing, regardless of the amount.

**Timeliness:** Reports must be made promptly.

**No Tipping-Off:** Obliged entities, their directors, officers, and employees are prohibited from disclosing to the customer or to third parties that an STR is being or has been submitted.

**Customer Identification Data:** All records obtained through CDD procedures (e.g., copies of identification documents, verification data).

**Transaction Records:** Details of all domestic and international transactions, including the amount, currency, date, and parties involved (originator and beneficiary information).

**Business Correspondence:** Relevant correspondence regarding business relationships.

**Unidade de Informação Financeira (UIF) – Financial Intelligence Unit:**

The central national authority responsible for receiving, analyzing, and disseminating suspicious transaction reports (STRs) and other relevant information concerning potential money laundering and terrorist financing. It provides operational intelligence to law enforcement agencies.

**URL:** http://uif.gov.st/ (Note: The website is primarily in Portuguese).

**Banco Central de São Tomé e Príncipe (BCSTP) – Central Bank of São Tomé and Príncipe:**

As the primary financial regulator, the BCSTP is responsible for licensing, regulating, and supervising financial institutions, including the implementation and enforcement of AML/CFT requirements within its purview. While there might not be specific VASP licensing yet, any entity providing financial services or related activities with virtual assets would likely fall under the BCSTP's oversight as a broader financial services provider. The BCSTP would also be instrumental in issuing specific regulations or guidelines related to VASPs.

**URL:** https://www.bcstp.st/ (Note: The website is primarily in Portuguese).

There are **no specific licensing requirements** for cryptocurrency custodians in Sao Tome and Principe.

However, any entity engaging in financial services (broadly defined) or activities that could be interpreted as traditional financial intermediation might fall under existing general financial services laws and require a license from the Banco Central de São Tomé e Príncipe (BCSTP) or other relevant authorities. This would be a matter of interpretation, as these laws predate crypto.

**Reference:** Banco Central de São Tomé e Príncipe (BCSTP) - Official Website: https://www.bcspt.st/ (You would typically find general financial licensing requirements here, but nothing specific to crypto.)

**Segregation of Client Assets Rules:**

There are **no specific rules** mandating the segregation of client digital assets for cryptocurrency custodians.

In the absence of specific crypto legislation, general principles of fiduciary duty and client asset protection (from traditional finance) *might* be informally expected, but they are not codified for digital assets.

There are **no specific insurance or bonding requirements** for cryptocurrency custodians.

Again, general commercial insurance principles would apply to any business, but nothing tailored to crypto risks (like hacking or key loss).

There are **no specific mandates** regarding the use of cold storage or other particular security measures for digital assets.

Best practices in the industry would dictate the use of robust security, but there is no legal requirement to do so in Sao Tome and Principe.

There is **no specific definition** of a "qualified custodian" in the context of digital assets or cryptocurrencies.

The concept of a qualified custodian is generally a feature of more developed regulatory frameworks, like those in the United States (e.g., SEC rules) or the European Union (e.g., MiCA).

There is **no publicly announced or pending legislation** specifically addressing cryptocurrency custody in Sao Tome and Principe.

The Central Bank (BCSTP) or the government has not issued public statements or whitepapers indicating upcoming regulations specific to digital asset custody.

Sao Tome and Principe is a member of the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA), and as such, is expected to adhere to the recommendations of the Financial Action Task Force (FATF).

FATF Recommendation 15 specifically addresses new technologies and recommends that Virtual Asset Service Providers (VASPs), which would include custodians, be regulated for AML/CFT purposes, licensed or registered, and subject to effective systems for monitoring and supervision.

Therefore, any entity operating as a crypto custodian *would* likely be expected to implement robust AML/CFT controls (e.g., Know Your Customer - KYC, transaction monitoring, suspicious activity reporting), even if the specific *custody* aspects are unregulated.