Digital Assets and Cryptocurrencies as an asset class for investment by Funds

Given the growing interest of Funds investing in Virtual Assets, the FSC issued a Guidance Notes for Funds Applications in March 2025 and conducted Industry Outreach sessions to clarify the licensing requirements for funds investing in Virtual Assets.  These requirements are summarized as follows:

• The Applicant must provide a comprehensive description of the type/class of Virtual Assets in which it will invest and same should be reflected in the Offer Document/PPM;
• The Applicant may also be required to demonstrate that these Virtual Assets fall within the definition of the VAITOS Act;
• The Applicant must indicate whether the Virtual Assets are regulated/listed/unlisted, and in which jurisdiction they are based/traded;
• The Applicant must provide details on the issuer(s) of the Virtual Assets, where relevant;
• The Applicant must indicate how the NAV will be computed, including submission of a Valuation Policy;
• The Applicant must submit a confirmation, and include a statement in its Offer document/PPM to the effect that it shall, at all times, on-board sophisticated or expert investors;
• The Applicant must submit a Risk Management Policy highlighting the main risks involved in the Virtual Assets and the mitigating controls in place;
• The Applicant must submit an AML/CFT Policy describing the specific ML/FT risks relating to Virtual Assets and the mitigation controls in place.

Given that investments in Digital Assets/Cryptocurrencies tend to be of a high-risk in nature, investments in these asset classes are not suitable for retail investors and are restricted to the following investors:

• Sophisticated investors;
• Expert investors;
• Expert Funds;
• Specialised Collective Investment Schemes; and
• Professional Collective Investment Schemes.

Whereas the Commission recognizes Virtual Assets as an asset class for investment and continues to authorize funds proposing to invest in Virtual Assets, the Commission wishes to inform prospective investors that any investments in Virtual Assets are at their own risks and that the investors are not protected by any statutory compensation arrangements in Mauritius.