Penalties for Unlicensed Virtual Asset Activities in Mauritius

The Virtual Asset and Initial Token Offering Services Act 2021 (VAITOSA) establishes a strict licensing regime for virtual asset service providers (VASPs) in Mauritius. Section 3 of VAITOSA provides that no person shall carry on or purport to carry on the business of providing virtual asset services without a licence granted by the Financial Services Commission (FSC).

Criminal Penalties

Section 20 of VAITOSA provides that a person who carries on virtual asset service provider services or issues initial token offerings without a licence commits an offence. On conviction, a person is liable to a fine not exceeding five million rupees and to imprisonment for a term not exceeding ten years, or to such other penalty as prescribed.

Scope of Unlicensed Activity

The prohibition applies to a broad range of activities. Section 7 of VAITOSA defines the regulated activities, including exchange between virtual assets and fiat currencies, exchange between one or more forms of virtual assets, transfer of virtual assets, and safekeeping or administration of virtual assets. Any person conducting these activities without authorisation is in breach of the Act.

Enforcement Approach

The FSC retains the power to take enforcement action against unlicensed operators. This may include cease and desist orders, applications to the Supreme Court for injunctions, and referrals to the Director of Public Prosecutions for criminal prosecution.

Practical Implications

Persons providing virtual asset services should review their activities against the definition in Section 7 of VAITOSA. Where an activity falls within the definition, a licence must be obtained before commencing operations. The penalties for non-compliance are severe and reflect the seriousness with which the regulator treats unlicensed activity.

This article is for general information purposes only and does not constitute legal advice.