Custodial wallet / SaaS in Togo

BCEAO Circular No. 00000002/RB/2020 on the Prohibition of the Use of Cryptocurrencies and other Digital Assets in WAEMU Member States (or similar wording/date):

Content: This circular (and accompanying press releases/communiqués) warned the public and, more importantly, explicitly prohibited financial institutions (banks, microfinance institutions, payment service providers) from engaging in activities related to cryptocurrencies, including buying, selling, holding, or facilitating transactions. It cited concerns about consumer protection, market volatility, and the risks of money laundering and terrorist financing.

For Financial Institutions: The BCEAO directives effectively prohibit regulated financial institutions in Togo (banks, microfinance, payment service providers) from engaging in crypto trading, exchange operations, or facilitating transactions. This means you cannot legally buy or sell crypto through traditional banks in Togo.

Exchanges: Any cryptocurrency exchange operating within Togo would be unlicensed and unregulated, operating outside the formal financial system. They would face significant legal and operational risks if they attempted to establish formal banking relationships.

High Risk and Unregulated: However, the environment is highly risky. There is no consumer protection, no regulatory oversight for exchanges operating in the grey area, and no legal recourse if funds are lost.

Central Bank of West African States (BCEAO): As Togo is a member of the UEMOA, the BCEAO serves as the central bank for the region. The BCEAO has consistently issued warnings regarding the risks associated with cryptocurrencies. These warnings typically state that virtual assets are not legal tender, are not regulated by the BCEAO, and users expose themselves to financial risks.

Lack of Specific Crypto Legislation: Like many countries in the region, Togo has not yet enacted comprehensive, standalone legislation specifically regulating virtual assets or cryptocurrency service providers. Discussions are ongoing at the UEMOA level, but concrete national laws and enforcement frameworks are still developing.

Absence of Specific Enforcement Actions:

Togo's National AML/CFT Law:

Loi n° 2018-009 du 22 juin 2018 portant lutte contre le blanchiment de capitaux et le financement du terrorisme au Togo: This law transposes international standards into Togolese law, including provisions on customer due diligence (CDD), suspicious transaction reporting (STR), record-keeping, and cooperation with authorities. It is the primary legal text governing AML/CFT in Togo. While it may not explicitly mention "virtual assets" or "VASPs" directly, the broad definitions of "assets" and "financial institutions" or "reporting entities" are often interpreted to encompass new technologies and services that fall within the scope of financial activity.

VASP Obligations: Under this law, VASPs (once regulated as reporting entities or covered by broad definitions) would be required to:

Compliance Requirement: FATF Recommendation 15 specifically addresses virtual assets and VASPs, requiring countries to regulate VASPs for AML/CFT purposes, license/register them, and apply the "Travel Rule" (requiring VASPs to obtain and transmit originator and beneficiary information for virtual asset transfers).

VASP Obligations: While Togo's specific VASP regulatory regime is still evolving, the underlying AML/CFT law expects all financial institutions and designated non-financial businesses and professions (DNFBPs) to adhere to FATF principles. This includes VASPs once they are explicitly designated or implicitly covered under existing definitions.