Cabo Verde -- Licensing Requirements Regulatory Overview

It's important to preface this by stating that Cabo Verde does not currently have a dedicated, specific licensing regime for Virtual Asset Service Providers (VASPs) like cryptocurrency exchanges, custody providers, or crypto-native payment processors.

The regulatory landscape is primarily characterized by official warnings from the central bank and the application of general Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) laws to virtual assets.

Current Regulatory Landscape in Cabo Verde

1. Banco de Cabo Verde (BCV) Stance:

   • The Banco de Cabo Verde (BCV), the central bank, has repeatedly issued public warnings regarding the risks associated with cryptocurrencies.
   • It has clarified that cryptocurrencies are not legal tender in Cabo Verde.
   • Crucially, the BCV has stated that it does not regulate, supervise, or license entities that deal exclusively with virtual assets. Therefore, any entity operating in this space is doing so outside the direct oversight of the BCV.
   • Regulatory Reference (BCV): While a specific URL for a single definitive statement might be hard to pin down as policies evolve and are communicated via press releases or general warnings, the BCV's official website is the primary source for their stance:
     • Banco de Cabo Verde Official Website: https://www.bcv.cv/

2. Lack of Dedicated Licensing Regime:

   • There are no specific laws or regulations that define a licensing framework for crypto exchanges, custody providers, or payment processors as distinct categories of financial institutions.
   • Unlike jurisdictions with bespoke crypto licenses (e.g., Malta, Gibraltar, UAE), Cabo Verde has not established such a system.

Registration vs. Licensing Regime

• Neither a specific licensing nor a dedicated registration regime for Virtual Asset Service Providers (VASPs) exists in Cabo Verde.
• Entities wishing to operate a business (including a crypto-related one) would need to comply with general company registration laws in Cabo Verde, but this is distinct from obtaining a financial services license.
• If a company were to deal with fiat currency in a way that constitutes a traditional financial service (e.g., remittances, payment processing of traditional money), then those specific activities would fall under the BCV's existing licensing requirements for financial institutions, which are separate from crypto activities.

Key Requirements (Primarily AML/CFT Focused)

While there's no licensing, the most significant regulatory obligation for entities dealing with virtual assets in Cabo Verde stems from AML/CFT legislation, which follows international standards set by the Financial Action Task Force (FATF).

1. AML/CFT Framework:

   • Cabo Verde has updated its AML/CFT laws to align with FATF recommendations, which include virtual assets and VASPs.

   • The Financial Intelligence Unit (Unidade de Informação Financeira - UIF) is the national authority responsible for receiving, analyzing, and disseminating suspicious transaction reports.

   • Key Law: Lei n.º 1/IX/2021, de 16 de março, on the Prevention and Combat of Money Laundering and the Financing of Terrorism, explicitly defines "Ativo Virtual" (Virtual Asset) and "Prestador de Serviços de Ativos Virtuais" (Virtual Asset Service Provider) and subjects them to AML/CFT obligations.

   • Regulatory Reference (AML/CFT Law):

     • Lei n.º 1/IX/2021, de 16 de março (AML/CFT Law): You would typically find this on the official gazette (Boletim Oficial) of Cabo Verde or through legal databases. A direct public URL from the government might be specific to a legislative portal. You can search for "Lei n.º 1/IX/2021 Cabo Verde branqueamento de capitais" to find official publications.
     • UIF Cabo Verde Official Website: https://www.uif.cv/ (This site provides information and guidance related to AML/CFT, including reporting obligations).

2. Specific AML/CFT Requirements for VASPs (as "Reporting Entities"):

   • Customer Due Diligence (CDD/KYC): Implementing robust KYC procedures to identify and verify the identity of customers, including beneficial owners. This means collecting name, address, date of birth, national ID, etc.
   • Enhanced Due Diligence (EDD): For higher-risk customers or transactions.
   • Record-Keeping: Maintaining records of customer identification data and transaction details for a specified period (typically 5-7 years).
   • Suspicious Transaction Reporting (STR): Reporting any suspicious transactions or activities to the UIF without delay.
   • Risk Assessments: Conducting a thorough assessment of money laundering and terrorist financing risks associated with their business operations, customers, products, and services.
   • Internal Controls: Establishing and maintaining appropriate internal policies, procedures, and controls to mitigate ML/TF risks, including the appointment of an AML compliance officer and staff training.
   • Sanctions Compliance: Adhering to national and international sanctions lists.

3. Capital Requirements:

   • There are no specific capital requirements for crypto companies as such, due to the absence of a dedicated licensing regime.
   • However, any company registered in Cabo Verde must meet general corporate capital requirements for its chosen legal form (e.g., limited liability company). If a VASP were to engage in activities requiring a traditional financial license, then the BCV's substantial capital requirements for such licenses would apply.

4. Local Presence:

   • There are no specific local presence requirements for crypto activities alone.
   • However, any company establishing a legal entity and operating physically in Cabo Verde would need to comply with general business registration and operational requirements, which often imply a local office, local directors (or resident representatives), and staff.

Application Process

Given the absence of a specific crypto licensing regime:

• There is no specific application process for a "crypto license" in Cabo Verde.
• If a VASP wishes to operate, its primary formal step would be to register as a general commercial entity with the relevant government agencies (e.g., Conservatória do Registo Comercial) and ensure compliance with tax, labor, and general business laws.
• The most crucial ongoing "compliance" aspect would be rigorous adherence to the AML/CFT obligations under Lei n.º 1/IX/2021, including registering with and reporting to the UIF as required.

Summary and Recommendation

Cabo Verde does not offer a clear regulatory path for dedicated cryptocurrency operations through specific licensing. While this might seem like a lack of regulation, it also means that businesses operate without the direct supervisory oversight of the central bank.

The most significant regulatory burden currently lies in compliance with AML/CFT laws, where Virtual Asset Service Providers are explicitly recognized as reporting entities.

Anyone considering operating a crypto business in Cabo Verde should:

1. Consult with local legal counsel specializing in corporate and financial law to understand the precise interpretation of existing laws and any nuances for virtual assets.
2. Ensure robust AML/CFT compliance from day one, in line with the Lei n.º 1/IX/2021 and guidance from the UIF.
3. Monitor regulatory developments, as the global landscape for crypto regulation is rapidly evolving, and Cabo Verde may introduce more specific frameworks in the future.