Vanuatu

{
  "analysis_text": "Vanuatu has established itself as a regulated offshore jurisdiction for cryptocurrency activities, transitioning from a general financial dealer framework to a dedicated legislative regime. The regulatory environment is anchored by the **Virtual Asset Service Providers (VASP) Act**, passed by Parliament in March 2025 (often referred to as the Act of 2024 during its bill stage). This Act empowers the **Vanuatu Financial Services Commission (VFSC)** to license and supervise all virtual asset service providers, including exchanges, wallet providers, and initial token offering (ITO) issuers. The legislation was designed to align Vanuatu with **FATF Recommendation 16** (the Travel Rule) and other international AML/CFT standards.\n\nPrior to the VASP Act, Vanuatu regulated crypto under the **Financial Dealers Licensing (Amendment) Act No. 9 of 2021**. This amendment introduced a **\u0027Class D\u0027 license**, which specifically authorized the distribution, secondary trading, and custody of digital assets. For several years, this was the primary route for crypto brokers to operate legally from Vanuatu. The new VASP Act expands on this by creating a more granular licensing system and explicitly defining \u0027virtual assets\u0027 while excluding digital representations of fiat currency and securities, which remain under traditional financial laws.\n\nRetail trading is fully permitted; there are no laws prohibiting individuals from owning or trading digital assets. However, the VFSC has issued multiple warnings clarifying that **cryptocurrencies are not legal tender** and that retail investors engage in the market at their own risk, without the safety net of statutory compensation funds. The regulator emphasizes consumer protection through the licensing of providers rather than through direct restrictions on users.\n\nOperational requirements for licensees are stringent to prevent \u0027shell\u0027 operations. Entities must maintain a **physical presence** in Vanuatu, including a local office and resident management (Director, Manager, and CTO). They are also subject to rigorous **AML/KYC obligations**, including the requirement to maintain details of Ultimate Beneficial Owners (UBOs) and conduct customer due diligence. The VFSC has also introduced a **Fintech Sandbox Utility**, allowing companies to test new products in a controlled environment for up to 12 months.",
  "confidence_level": "High",
  "executive_summary": "Retail cryptocurrency trading is legal and formally regulated in Vanuatu. The Vanuatu Financial Services Commission (VFSC) oversees the sector under the Virtual Asset Service Providers (VASP) Act, enacted in early 2025 (often cited as the VASP Act of 2024 in draft forms). This legislation establishes a comprehensive licensing regime for exchanges and custodians, building upon the earlier \u0027Class D\u0027 license framework introduced in 2021. While cryptocurrencies are not legal tender, individuals are free to buy, sell, and hold them, provided they use licensed intermediaries.",
  "grounding_urls": [
    {
      "resolved_url": "https://coingeek.com/vanuatu-passes-digital-asset-framework/",
      "title": "coingeek.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQEpmGVmgbAzBXJQpZ1OD10pODrjgFTh48dNTNY-xX-BOfhkAgxCSMachLxYy22uq-NFc6QPqqT355K0TX_g2G4vTgMq_50_7jzc5vmBr_eXp3rzWkzEeHiCLuNSqrfPl26nmrdpCx7kqtqIuqvXxV6tG2q2SeCTiQ=="
    },
    {
      "resolved_url": "https://www.binance.com/en/square/post/04-01-2025-vanuatu-implements-strict-regulations-for-digital-assets-22319119265962",
      "title": "binance.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQEk4sTrce9CpeOv3XoXlndpwuiq_kZTh2mawz2tc_qHsVu-ggFmvxizBARKFGai46ybeC6aamNiL01OPjlRpgcWBv0uYp73RVubywmB14QwirB5b7glNjEGwU0lTMrZn-YnHT0Y_JDVcTLDWhen8UEccddZOZ7MOiPvtg-RXLy3wFN21lBWr6loYbuN8Tt00haYlOz3spOdKGA-QVXtI9leJItHi6nHpTUH1eSC-PMzTlefv0o="
    },
    {
      "resolved_url": "https://crypto.news/vanuatu-passes-crypto-licensing-and-regulation-framework/",
      "title": "crypto.news",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFNi-WcvS32rxNFF5ZX7pe8RBRsbNam0KVtd0XJfdROT-mGXOC12Yukb50PgmkTwkjCWsSi4TNNPCMVCKeGOqgIX43lRzh_nvCDEhK-f9_D954V1WETcrV9EHi-qW72_7HfedFbsrHgRJdqklvx5h8jaLaoy04aQREsc2I_UcXCdiUpgHv7zGXF"
    },
    {
      "resolved_url": "https://fca.vu/vfsc-release-clarifying-the-new-rules-on-digital-assets-and-cryptocurrencies/",
      "title": "fca.vu",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQE03NXbDbfnoD91car9mTvBvyOFzRFJcTn40ZHurkgWHVK0sujytidwQ_75flL2tVM9Ds1assPKsy2wbxWxBik7ogeGO4p-0vGq6bbC4REbIJQVhmNv4AQ7aOMYcLEeOYzwKM_lzlSHxhTzdp86DWUctsrAb-WTYmhUSgIPCHYuwL8vUcRKi3XkiQ9geDldKzicpbobaZLN"
    },
    {
      "resolved_url": "https://fca.vu/vanuatu-passes-virtual-asset-service-providers-vasp-act/",
      "title": "fca.vu",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQEzT6ONTAPXIFuGLRzql-3pi0WLLOAWKjZseCjrv5TZJC1rSfatRmnXIbOkf2IceA04rfYqCOX4OydCI7wVPzEsuVltPQW61nDisBrio0t_e1uaWc7YFtjki8JGgIhb4m_HfEyJduMcXr7yUkw_fWGDkE4zyRa-gNPTMn1_1xMeZsto"
    },
    {
      "resolved_url": "https://vanuatucbipassport.com/is-crypto-legal-in-vanuatu/",
      "title": "vanuatucbipassport.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFMhjr9VmMWmSTnpkgLYE_5bKIkgYup8QD8TdbMiQNjXwBY5iaEtmJDdyTKRzmWvXZWrG2s5kquxcU1vvkfUoKrBJZJZWrj5ZUACCQ3rDTs0LjNgaPwBGggEZ4x3OpBkMppRfRLhjMn-bjyImheyrUFdSqd-Po="
    },
    {
      "resolved_url": "https://vimb.vu/vanuatus-bold-leap-into-the-future/",
      "title": "vimb.vu",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQE-ZfSX-3XspR9UuXmmmiv7nzbWOXHEH6bIte2QLdRGLlsV-z3OO7FuFg6iVfhljO0W9X2nWeFytZMd35RajiT6JGQFMacinq4A1EZPW0c9GzegP_GGg1t-adCTJ9rx8FA4QJlR9uB9TZJB77DOMg=="
    },
    {
      "resolved_url": "https://www.vfsc.vu/wp-content/uploads/2025/06/Guidence-Digital-Asset.pdf",
      "title": "vfsc.vu",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQF75KY1R8KhQKI2BxOwGtfF84C4YaGmN-_WbkWrEJ0M6pulXHSCXPkM75KpRqko5xaj69L15ObwXLooq2sNTHcTRK5E1Bs3ZC5U-xBKEBRQ8v6Ebca5BQSb-GUavEcwK3XRMjsBxlllMyC09v3U3O6f5uFoHGAeMke7tCZbDk9Cvtb4KFs="
    },
    {
      "resolved_url": "https://atomiqconsulting.com/crypto-license/vanuatu/",
      "title": "atomiqconsulting.com",
      "url": "https://vertexaisearch.cloud.google.com/grounding-api-redirect/AUZIYQFrMYgyOm7uqduh9f0d1ggpFPkUmemB52jllAkUACq3wbt9oTKh7rPSmtdDdpsmahxfLa-tG8YxYpgWbKPYolI1vn0FwXsA6W5aBofd9-_acnUa--w1NheJAvAhhjxeOnej7WMDao_DNVDPus08nEE="
    }
  ],
  "status": "Allowed-Regulated",
  "structured_data": {
    "confidence_level": "High",
    "detailed_analysis": "Vanuatu has established itself as a regulated offshore jurisdiction for cryptocurrency activities, transitioning from a general financial dealer framework to a dedicated legislative regime. The regulatory environment is anchored by the **Virtual Asset Service Providers (VASP) Act**, passed by Parliament in March 2025 (often referred to as the Act of 2024 during its bill stage). This Act empowers the **Vanuatu Financial Services Commission (VFSC)** to license and supervise all virtual asset service providers, including exchanges, wallet providers, and initial token offering (ITO) issuers. The legislation was designed to align Vanuatu with **FATF Recommendation 16** (the Travel Rule) and other international AML/CFT standards.\n\nPrior to the VASP Act, Vanuatu regulated crypto under the **Financial Dealers Licensing (Amendment) Act No. 9 of 2021**. This amendment introduced a **\u0027Class D\u0027 license**, which specifically authorized the distribution, secondary trading, and custody of digital assets. For several years, this was the primary route for crypto brokers to operate legally from Vanuatu. The new VASP Act expands on this by creating a more granular licensing system and explicitly defining \u0027virtual assets\u0027 while excluding digital representations of fiat currency and securities, which remain under traditional financial laws.\n\nRetail trading is fully permitted; there are no laws prohibiting individuals from owning or trading digital assets. However, the VFSC has issued multiple warnings clarifying that **cryptocurrencies are not legal tender** and that retail investors engage in the market at their own risk, without the safety net of statutory compensation funds. The regulator emphasizes consumer protection through the licensing of providers rather than through direct restrictions on users.\n\nOperational requirements for licensees are stringent to prevent \u0027shell\u0027 operations. Entities must maintain a **physical presence** in Vanuatu, including a local office and resident management (Director, Manager, and CTO). They are also subject to rigorous **AML/KYC obligations**, including the requirement to maintain details of Ultimate Beneficial Owners (UBOs) and conduct customer due diligence. The VFSC has also introduced a **Fintech Sandbox Utility**, allowing companies to test new products in a controlled environment for up to 12 months.",
    "executive_summary": "Retail cryptocurrency trading is legal and formally regulated in Vanuatu. The Vanuatu Financial Services Commission (VFSC) oversees the sector under the Virtual Asset Service Providers (VASP) Act, enacted in early 2025 (often cited as the VASP Act of 2024 in draft forms). This legislation establishes a comprehensive licensing regime for exchanges and custodians, building upon the earlier \u0027Class D\u0027 license framework introduced in 2021. While cryptocurrencies are not legal tender, individuals are free to buy, sell, and hold them, provided they use licensed intermediaries.",
    "important_considerations": [
      "Cryptocurrencies are explicitly defined as \u0027not legal tender\u0027 by the VFSC.",
      "Retail investors are warned that they are not protected by statutory compensation schemes if a platform fails.",
      "Licensees must maintain a physical office and key personnel (Manager, Director, CTO) within Vanuatu.",
      "The VASP Act excludes Central Bank Digital Currencies (CBDCs) and digital representations of fiat from its definition of virtual assets.",
      "Strict penalties exist for operating without a license, including fines up to 250 million Vatu and imprisonment."
    ],
    "key_regulatory_pillars": [
      "Vanuatu Financial Services Commission (VFSC) as the primary regulator",
      "Virtual Asset Service Provider (VASP) License requirements",
      "Mandatory AML/CTF compliance under the Anti-Money Laundering and Counter-Terrorism Financing Act",
      "Physical presence requirement for licensees (local office and management)",
      "Fintech Sandbox Utility for testing innovative financial products"
    ],
    "landmark_legislation": [
      {
        "date_enacted": "2025-03-26",
        "identifier": "Act No. of 2024 / 2025",
        "name": "Virtual Asset Service Providers Act",
        "summary": "A comprehensive framework regulating VASPs, requiring them to obtain licenses for exchange, custody, and ICO services. It grants the VFSC enforcement powers and mandates strict AML/KYC compliance.",
        "url": "https://vfsc.vu/"
      },
      {
        "date_enacted": "2021-07-01",
        "identifier": "Act No. 9 of 2021",
        "name": "Financial Dealers Licensing (Amendment) Act",
        "summary": "Amended the principal act to introduce a \u0027Class D\u0027 license specifically for dealing in digital assets, marking the first formal regulation of the sector.",
        "url": "https://vfsc.vu/wp-content/uploads/2021/08/Financial-Dealers-Licensing-Amendment-Act-No.-9-of-2021.pdf"
      },
      {
        "date_enacted": "2014-01-01",
        "identifier": "Act No. 13 of 2014",
        "name": "Anti-Money Laundering and Counter-Terrorism Financing Act",
        "summary": "Establishes the general AML/CTF obligations that all financial dealers, including crypto service providers, must adhere to.",
        "url": null
      }
    ],
    "notes_and_comments": "The analysis reflects the regulatory landscape as of late 2025. The passage of the VASP Act in March 2025 marks a significant maturation from the 2021 \u0027Class D\u0027 amendment, moving Vanuatu from a general financial dealer model to a specific VASP regulatory model comparable to other sophisticated jurisdictions.",
    "primary_sources": [
      {
        "date": "2025-05-01",
        "key_quote": "These Guidelines are issued under Section 59 of the Virtual Asset Service Providers Act... to ensure that applicants seeking to be licensed as VASPs are aware of all relevant information.",
        "source_type": "regulator",
        "title": "Guidance Notes on Requirements for Licensee Application as a Virtual Asset Service Provider",
        "url": "https://vfsc.vu/"
      },
      {
        "date": "2021-07-01",
        "key_quote": "The Financial Dealers Licensing (Amendment) Act No. 9 of 2021 created four (4) classes of FDL licenses... Class D license authorizes the regulated and licensed entity to provide service... in relation to digital assets.",
        "source_type": "law_text",
        "title": "Financial Dealers Licensing (Amendment) Act No. 9 of 2021",
        "url": "https://vfsc.vu/wp-content/uploads/2021/08/Financial-Dealers-Licensing-Amendment-Act-No.-9-of-2021.pdf"
      },
      {
        "date": "2025-04-07",
        "key_quote": "Virtual Assets or Cryptocurrencies, unlike fiat currencies, are not legal tender in Vanuatu... the VFSC does not recommend them for retail investors without thorough understanding of the associated risks.",
        "source_type": "regulator",
        "title": "VFSC Statement on Virtual Assets",
        "url": "https://vfsc.vu/"
      }
    ],
    "remaining_uncertainties": [
      "The exact transition timeline for existing \u0027Class D\u0027 license holders to the new VASP Act regime is not fully detailed in public summaries.",
      "Specific capital requirement amounts under the new VASP Act (as opposed to the old Class D bond of 5 million Vatu) need verification from the full text of the 2024/2025 Act."
    ],
    "secondary_sources": [
      {
        "date": "2025-04-07",
        "key_quote": "The South Pacific Island nation\u0027s Parliament passed the \u0027Virtual Asset Service Provider (VASP) Act\u0027 on March 26.",
        "source_type": "news",
        "title": "Vanuatu passes digital asset framework",
        "url": "https://coingeek.com/vanuatu-passes-digital-asset-framework/"
      },
      {
        "date": "2025-03-31",
        "key_quote": "On March 26, the local parliament passed the Virtual Asset Service Providers Act, granting the Vanuatu Financial Services Commission (VFSC) the authority to issue crypto licenses.",
        "source_type": "news",
        "title": "Vanuatu Implements Strict Regulations for Digital Assets",
        "url": "https://www.binance.com/en/news/flash/vanuatu-implements-strict-regulations-for-digital-assets-2025-03-31"
      }
    ],
    "status": "Allowed-Regulated"
  }
}