Seychelles has quietly become one of the most important jurisdictions in global crypto. OKX, Bybit, eToro, KuCoin, HTX and BitMEX all operate group entities from the archipelago, drawn historically by a combination of light regulation, fast incorporation, and tax neutrality. For years, the absence of a dedicated licensing regime meant that crypto exchanges could base substantial operations in Seychelles without a specific virtual-asset authorisation. That era is over.
The Virtual Asset Service Providers Act 2024 ended the no-licence period on 1 September 2024, establishing a formal regime under the Financial Services Authority (FSA). The Act requires any entity providing virtual-asset services from or within Seychelles — exchange, custody, broking, or transfer — to obtain a VASP licence, meet ongoing capital and governance requirements, and submit to FSA supervision. The legislation was Seychelles' response to mounting pressure from the Financial Action Task Force and correspondent banks to demonstrate credible oversight of its crypto sector.
What changed in 2025 was enforcement. For the first months after the Act took effect, the FSA focused on registration and application processing. Through 2025, however, the regulator moved decisively into supervision. Licensed and applicant firms have reported live system walk-throughs in which FSA officers inspect trading engines, custody arrangements and compliance systems in real time, rather than relying on documentation alone. The shift signalled that Seychelles intends its regime to have teeth.
Substance is the recurring theme. The FSA has made clear that a Seychelles VASP licence is not a brass plate. Genuine substance means local directors with relevant expertise, a physical office, a resident compliance function, and decision-making that actually occurs in the jurisdiction rather than being rubber-stamped from abroad. Firms that treated Seychelles as a flag of convenience have found the new expectations uncomfortable, and several have had to build real operations or reconsider their structure.
A new Code of Corporate Governance took effect in January 2026, raising the bar further. The Code imposes board composition standards, risk-management obligations, and reporting requirements that bring Seychelles closer to mainstream financial-services norms. For exchanges accustomed to minimal governance overhead, the Code represents a meaningful compliance investment, but it also lends the jurisdiction the credibility that institutional counterparties and banks increasingly demand.
How does Seychelles compare to the alternatives? Against Mauritius, Seychelles is faster and lighter but now carries comparable substance expectations. Against Vanuatu, Seychelles offers greater credibility and a more developed regulator, though Vanuatu remains cheaper. Against a MiCA CASP licence, Seychelles is dramatically faster and cheaper but confers no EU passporting rights — a Seychelles licence serves global and non-EU markets, whereas MiCA is the gateway to European retail clients.
For exchanges weighing where to base operations in 2026, the calculus has changed. Seychelles remains attractive for its speed, cost and tax neutrality, but it is no longer a place to avoid regulation — it is a place to be regulated more lightly than in the EU while still satisfying genuine supervisory expectations. Firms that embrace the substance requirements will find Seychelles a durable base; those still hoping for the old hands-off treatment will be disappointed by an FSA that has decided to enforce.
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