For a very long time Vanuatu, always the most popular offshore licensing jurisdiction for self-regulated FX/CFD operations, disapproved dealing with Cryptocurrencies in all forms for its VFSC licenses, to the extent that if a small reference to crypto was made on the licensee’s website, regardless whether as a means for payment, a traded commodity or a CFD, the license could have been revoked and the 50K$ bond forfeited. Seemingly all of it is about to change.
We sat down with Advocate & Notary Tal Itzhak Ron, Chairman and CEO, and Advocate Genia Gurevitz, Head of Banking and Payments Services, from leading legal and banking firm, Tal Ron, Drihem & Co. to shed some light on what measures are taking effect in Vanuatu this week, and if there is anything groundbreaking about it (Hint: There is, indeed, and Finance Magnates are the first to reveal it!).
Tal explains that as of July 22nd, the amendment to the Financial Dealers Licensing Act, without any preliminary announcement, surprisingly went into effect which allows the “distribution, secondary trading, custodial storage and provision of investment advice or other services in relation to digital assets.” This comes after years that any engagement with cryptocurrencies would be restricted and seen as illegal by the regulators in Vanuatu, making anyone who wished to deal with Crypto go other ways.
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Tal Ron, Drihem & Co., Law Firm lobbied massively for that change to happen, prepared for the announcement, and built the payments infrastructure 1.5 years in advance to facilitate the needs of those wishing to enrich their services offered and give their business a competitive edge, Genia continues. This amendment placed Vanuatu in the major league, with other, more established, jurisdictions that Tal Ron, Drihem & Co. have already been using since 2017 to represent clients in issuing coins and engage with other blockchain crypto activities, such as Gibraltar, Switzerland, Singapore, Malta, and Estonia. The amendment seeks to expand the possibilities for already-licensed companies in Vanuatu (for which Tal and Genia’s firm are responsible for a large percentage of those), as well as to attract new digital asset companies for which the most important part is to know how to bank them properly and protect their interests while staying fully compliant and socially responsible.
The novelty about the new legislation is not about brokers being able to use Crypto deposits or trade or offer Crypto for themselves or at their business, which is great in itself, but now they are finally able, if play their card right and found adequate, to open a bank account in exceptional brick-and-mortar banks such as Bank Frick in Liechtenstein, which our firm partners with, Genia explains.
Genia discloses that this type of legislation is similar to what they have already dealt with in the past in Gibraltar, one that effectively allows (or does not prevent) crypto-entrepreneurs to launch their own digital currencies. Therefore, Tal’s team has already gathered the knowledge and infrastructure to facilitate the growing demand for Vanuatu companies from all aspects and built a complex network of payment companies accepting the Vanuatu license, thus allowing companies regulated there to issue coins and collect payments, aside of operating FX sites.