Is Crypto Legal in the Comoros?

Anjouan Offshore Finance Authority (AOFA): This is the primary authority responsible for licensing offshore financial services, including what are often adapted for cryptocurrency businesses.

Central Bank of Comoros (Banque Centrale des Comores - BCC): While the BCC oversees traditional financial institutions and monetary policy for the entire Union of the Comoros, it generally has less direct specific oversight or licensing for offshore virtual asset activities compared to AOFA.

Ministry of Finance: Holds general oversight over financial matters.

Specific Crypto Law vs. General Financial Services License:

The Union of the Comoros does not have a dedicated, comprehensive law specifically for virtual assets or cryptocurrencies akin to those in major financial hubs.

Instead, virtual asset businesses seeking to operate from Comoros (via Anjouan) typically apply for a general financial services license or a Money Service Business (MSB) license under the AOFA framework. These licenses are then interpreted and adapted to cover crypto-related activities.

Exchanges (Spot, Derivatives): Would typically require an AOFA Financial Services License or MSB license. This allows for the facilitation of transactions, trading, and conversion of virtual assets.

Custody Providers: Would also fall under the broader Financial Services License, as they manage and secure virtual assets on behalf of clients. Specific conditions regarding security, insurance, and segregation of assets might be imposed.

Payment Processors (Fiat-to-Crypto, Crypto-to-Fiat, Crypto-only): An MSB license is the most common route for these entities, as they facilitate money transfers and currency exchange, which crypto payments are increasingly seen to represent.

Businesses must formally apply for a license.

They must meet specific criteria and undergo due diligence by the AOFA.

Licenses are granted after approval, requiring ongoing compliance to maintain validity.

The capital requirement is typically modest compared to many other jurisdictions. For a general Financial Services or MSB license from AOFA, the minimum paid-up capital requirement can be around USD 10,000 to USD 50,000, though this can vary. It's often required to be deposited in a local bank account or an account approved by the AOFA.

Comoros is currently on the FATF (Financial Action Task Force) "grey list" (Jurisdictions under increased monitoring). This means it is actively working with the FATF to address strategic deficiencies in its AML/CFT regimes.

Despite this, licensed entities under AOFA are required to implement robust Anti-Money Laundering (AML) and Know Your Customer (KYC) policies and procedures, including:

Customer Due Diligence (CDD): Verification of identity for all clients (individuals and corporate).

Enhanced Due Diligence (EDD): For high-risk clients or transactions.

Monitoring: Ongoing monitoring of transactions for suspicious activities.

Reporting: Reporting of suspicious transactions (STRs) to the local Financial Intelligence Unit (FIU), which is likely the National Financial Intelligence Processing Unit (Unité Nationale de Traitement des Renseignements Financiers - UNTRF).

Compliance Officer: Appointment of a qualified AML/CFT Compliance Officer.

Record Keeping: Maintaining records of transactions and client identification for a prescribed period.

Registered Office: All licensed entities must have a registered office address in Anjouan.

Local Agent/Representative: It's common to require a local registered agent or representative who acts as a liaison with the AOFA.

Physical Presence/Staff: While a full physical office with local staff isn't always strictly mandated for the offshore structures, having an operational substance plan is increasingly important for reputational and compliance purposes.

Company Formation: Establishment of an International Business Company (IBC) or similar legal entity in Anjouan.

Business Plan: A detailed business plan outlining operations, target markets, technology, risk management, and compliance strategies.

Fit and Proper Test: Directors, shareholders, and key personnel must pass a "fit and proper" test, demonstrating their good repute, competence, and financial soundness.

Technology & Security: Evidence of robust IT infrastructure and security measures to protect customer data and assets.

Audit Requirements: Annual audited financial statements are usually required.

Company Formation: Register an International Business Company (IBC) or equivalent legal entity with the Anjouan Registrar of Companies.

Preparation of Documentation: Compile all required documents, including:

AML/KYC policies and procedures manual.

Biographical data (CVs, police clearance, bank references, professional references) for all directors, shareholders, and key personnel.

Proof of funds for capital requirements.

Technology audit or security assessment reports.

Organizational charts and governance structures.

Application forms provided by AOFA.

Submission of Application: Lodge the complete application package with the Anjouan Offshore Finance Authority (AOFA).

Due Diligence and Review: The AOFA will review the application, conduct due diligence on the company and its principals, and may request additional information or clarifications.

Interview (Optional): Key personnel might be invited for an interview.

Approval and Licensing: Upon satisfactory review and fulfillment of all conditions, the AOFA will issue the financial services or MSB license.

Ongoing Compliance: Maintain compliance with all regulatory requirements, including periodic reporting and audits.

A direct official, active website for AOFA with comprehensive laws and regulations is often difficult to pinpoint. Searches for "Anjouan Offshore Finance Authority" will lead to various service providers offering licensing services.

Search Term Suggestion: You would typically find references to the AOFA through corporate service providers or legal firms specializing in offshore finance in the region.

Note: While the BCC is the central monetary authority, its direct role in specific virtual asset licensing via Anjouan is limited. However, it sets broader financial regulations.

Financial Action Task Force (FATF) - Comoros' Status:

Information on Comoros' status on the FATF grey list can be found on the official FATF website. This is crucial for understanding the international perception and compliance burden.

Search for "Jurisdictions under increased monitoring" and look for Comoros.

The FIU of Comoros, responsible for receiving and analyzing suspicious transaction reports. Its specific website might be embedded within the Ministry of Finance or Central Bank portals if a standalone site isn't present.

Reputation: Due to Comoros' FATF grey-list status and the offshore nature of Anjouan licensing, obtaining banking relationships for a Comoros-licensed crypto entity can be challenging. International banks often de-risk jurisdictions with perceived higher AML/CFT risks.

Legal Advice: Given the complexities and the lack of a dedicated crypto law, it is highly advisable to seek legal counsel from firms specializing in Comorian offshore finance and cryptocurrency regulations before proceeding with any application.

Evolving Landscape: Cryptocurrency regulations are rapidly evolving globally. What is current today might change in the near future.

Yes, in principle, likely adopted as part of broader AML/CFT framework. Comoros is an ESAAMLG member and is committed to implementing the FATF Recommendations. The FATF updated its Recommendations (specifically Recommendation 15 and 16, which underpin the Travel Rule) in June 2019 to explicitly cover VAs and VASPs.

Comoros enacted a new Anti-Money Laundering and Counter-Terrorist Financing Law (Law No. 19-026/AU) on December 26, 2019. This law is designed to align Comoros's AML/CFT framework with international standards, including FATF recommendations. It is highly probable that this law, or subsequent regulations under it, provides the legal basis for regulating VASPs and implementing the Travel Rule.

Specific VASP-focused legislation and explicit Travel Rule mandates are harder to locate publicly. Many jurisdictions pass a general AML/CFT law first and then issue detailed implementing regulations for specific sectors (like VAs) later.

The Anti-Money Laundering and Counter-Terrorist Financing Law No. 19-026/AU came into effect shortly after its promulgation in December 2019. This would be the general effective date for the overarching AML/CFT framework.

The specific effective date for obligations pertaining directly to the Travel Rule for VASPs would depend on the issuance of any dedicated VASP regulations or guidance, which are not readily available in public records.

Assuming Comoros aligns with the FATF standard for the Travel Rule (Recommendation 16), the threshold amount for collecting and transmitting originator and beneficiary information for VA transfers is:

USD/EUR 1,000 or more (for transfers where the ordering VASP or beneficiary VASP is a financial institution).

USD/EUR 0 (meaning all transactions, for transfers where both the ordering and beneficiary VASPs are not financial institutions, or where one side is an unhosted wallet). Many jurisdictions, however, focus on the USD/EUR 1,000 threshold initially.

Without specific Comorian VASP regulations, the FATF standard is the most likely reference.

Comoros is expected to adhere to the FATF definition of VASPs, which includes:

Exchanges between VAs and fiat currencies.

Exchanges between one or more forms of VAs.

Safekeeping and/or administration of VAs or instruments enabling control over VAs (custodian wallet providers).

Participation in and provision of financial services related to an issuer’s offer and/or sale of a VA.

Any entity conducting these activities as a business for or on behalf of another person would likely be subject to regulation.

The FATF does not prescribe a specific technical solution for Travel Rule compliance. It requires that the necessary originator and beneficiary information be collected, held, and transmitted between VASPs.

Comoros is unlikely to have issued specific technical requirements beyond the general obligation to comply with the Travel Rule's data transmission requirements. VASPs operating in Comoros would likely need to adopt an industry-standard technical solution (e.g., using TRISA, OpenVASP, Sygna, Travel Rule Protocol, etc.) to meet these obligations, much like in other jurisdictions.

Fines: Significant monetary penalties for institutions and individuals.

Imprisonment: For individuals found guilty of serious AML/CFT breaches.

Suspension or Revocation of Licenses: For regulated entities.

Reputational Damage: Though not a legal penalty, non-compliance can severely impact an entity's ability to operate.

The specific scale of penalties for VASP-related non-compliance would depend on detailed regulations, but they would generally align with those for other financial institutions.

Anti-Money Laundering and Counter-Terrorist Financing Law No. 19-026/AU of December 26, 2019 (Comoros): While a direct English or French version with a public URL is difficult to find, its existence and purpose are referenced in ESAAMLG documents and other legal analyses. It forms the backbone of Comoros's current AML/CFT framework.

Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG): Comoros is a member. ESAAMLG provides Mutual Evaluation Reports and follow-up reports that assess member states' compliance with FATF Recommendations.

Overall Regulatory Landscape: The primary financial regulator in Comoros is the Banque Centrale des Comores (BCC), which oversees traditional banking and financial services. Comoros is also a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), indicating a commitment to international AML/CFT standards. However, these standards typically recommend, rather than mandate, specific digital asset custody rules for individual member states unless adopted into national law.

None Specific: There are no specific licensing requirements for cryptocurrency custodians in Comoros as there is no specific legal definition or framework for such entities. Entities operating in the crypto space would likely fall into an unregulated category or might be subject to existing general financial services laws if their activities could be broadly interpreted as such (though this is unlikely for pure crypto custody without specific legal amendments).

Segregation of Client Assets Rules:

None Specific for Digital Assets: Since there are no specific custody laws, there are no explicit rules mandating the segregation of client digital assets from a custodian's proprietary assets. Traditional financial institutions under BCC oversight are subject to segregation rules for fiat currencies and securities, but these do not extend to digital assets without specific legislation.

None Specific: There are no specific insurance or bonding requirements for digital asset custodians.

None: There are no specific mandates or requirements for the use of cold storage or any particular security measures for digital assets.

None: There is no legal definition of a "qualified custodian" in the context of digital assets within Comorian law.

No Public Information: There is no publicly available information suggesting that specific legislation for digital asset custody is currently pending or under active consideration in Comoros.

Banque Centrale des Comores (BCC): The central bank is the primary financial regulator. Its website contains general laws and regulations pertaining to banking and finance, but no specific crypto provisions.

URL: https://www.banquecentrale.km/ (Primarily in French)

You would typically find texts réglementaires (regulatory texts) here, but without specific crypto laws, they won't address custody.

Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Framework: Comoros has AML/CFT legislation, such as Law No. 11-001/AU on combating money laundering and terrorist financing (and subsequent amendments). This law would likely apply to any financial activity, but it does not specifically define or regulate virtual asset service providers (VASPs) or custody activities.

Reference: While a direct public URL for the latest consolidated AML/CFT law is hard to find in English, its existence is noted by international bodies.

ESAAMLG: Comoros is a member of the Eastern and Southern Africa Anti-Money Laundering Group. ESAAMLG mutual evaluation reports sometimes touch on a country's readiness to regulate VASPs, but this reflects recommendations rather than implemented national laws.

URL (ESAAMLG General Site): https://www.esaamlg.org/

Requirements: Comoros is obligated to implement all UN Security Council Resolutions, which include asset freezes, travel bans, and arms embargoes against individuals, entities, and countries designated by various UN sanctions committees (e.g., Al-Qaida, ISIS, Taliban, DPRK, Iran, etc.).

Screen all customers (KYC/CDD) and transactions against the UN Consolidated Sanctions List.

Freeze virtual assets and funds of designated persons and entities without delay.

Prohibit making virtual assets, funds, or economic resources available to sanctioned parties.

Report any matches or suspicious activities to the relevant Comorian authorities (e.g., CENTIF).

Legal Reference: UN Security Council Resolutions (e.g., UNSCR 1267, 1373, 1718, etc.) are binding on all UN member states.

U.S. persons wherever they are located (U.S. citizens, permanent residents, entities incorporated in the U.S., and their foreign branches).

All transactions touching the U.S. financial system or involving U.S. dollar clearing.

Transactions with Specially Designated Nationals (SDNs) and Blocked Persons, regardless of the currency or location.

VASP Obligations: Any VASP in Comoros dealing with U.S. persons, U.S. dollars, or facilitating transactions that route through the U.S. financial system, or dealing with global crypto platforms that have U.S. nexus, must:

Screen all customers and transactions against the SDN List and other OFAC sanctions lists.

Block (freeze) virtual assets of SDNs and other sanctioned persons/entities and report the blocking to OFAC.

Reject (prohibit) transactions that violate OFAC sanctions and report them.

Implement robust geo-blocking measures for sanctioned jurisdictions.

Legal Reference: Various U.S. Executive Orders and statutory authorities.

OFAC Virtual Currency Guidance: https://ofac.treasury.gov/media/13217/download?inline

EU nationals wherever they are located.

Entities incorporated or constituted under the law of an EU Member State.

Economic activities carried out in whole or in part within the territory of the EU.

VASP Obligations: If a VASP in Comoros has any connection to the EU (e.g., EU-based customers, partners, or uses EU-based service providers), it must:

Screen customers and transactions against the EU Consolidated Sanctions List.

Freeze assets of designated persons/entities and report to relevant EU national competent authorities.

Comply with any specific prohibitions (e.g., restrictions on services to certain entities or regions).

Legal Reference: Various EU Regulations and Decisions.

EU Sanctions Map (Consolidated List): https://sanctions-map.eu/