On-shore VASP in 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.

If an exchange facilitates the exchange of virtual assets for fiat currency (e.g., STN - Sao Tome Dobra) or vice versa, and offers services akin to traditional banking or money remittance, it might be deemed to be conducting activities that require a banking license or a payment service provider license from the Banco Central de São Tomé e Príncipe (BCSTP).

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.

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.

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

A locally incorporated legal entity.

Physical office space.

Local management and staff, including a compliance officer.

Fit and proper assessment for directors and key personnel.

Initial Consultation: Informal discussions with the BCSTP.

Formal Application Submission:

Detailed business plan.

Organizational structure and governance arrangements.

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

Comprehensive AML/CFT policies and procedures.

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.

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:

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.

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:

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.

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.

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

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

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

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

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

No specific legislation or regulatory guidance explicitly implementing the FATF Travel Rule for VASPs has been publicly identified.

Banco Central de São Tomé e Príncipe (BCSTP) - Comunicado n.º 001/2022:

Primary Regulator: The main financial regulator in Sao Tome and Principe is the Banco Central de São Tomé e Príncipe (BCSTP). Their pronouncements on digital currencies typically revolve around issuing warnings to the public about the risks associated with cryptocurrencies, rather than specific enforcement actions against entities. They often emphasize that cryptocurrencies are not legal tender.

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