Labuan Digital Asset

Activities

A Labuan Digital Asset License, issued by the Labuan Financial Services Authority (Labuan FSA), allows companies to engage in a variety of digital asset-related services, primarily focused on international markets. Licensed entities can conduct the following activities:

Digital Assets Exchanges
Operate platforms that facilitate the buying, selling, and trading of digital assets and other digital assets.

Digital Wallet Services
Provide secure storage and management solutions for digital assets such as Bitcoin, Ethereum, and other digital assets.

Custodial Services
Act as custodian for digital assets, securely managing client funds.

Payment Solutions
Offer payment services using digital currencies for e-commerce and remittance purposes.

Initial Coin Offerings (ICOs) and Token Offerings
Assist in or manage the issuance of digital tokens, subject to regulatory approvals.

Advisory Services
Provide consulting services related to digital asset investments, strategies, and blockchain technology.

Digital Assets to-Fiat and Fiat-to-Digital Assets Conversion
Provide consulting services related to digital asset investments, strategies, and blockchain technology.

Requirements

To obtain a Digital Asset License in Labuan, companies must meet the following key requirements:

Business Plan
Applicants must submit a detailed business plan outlining the digital asset services they intend to provide, target market, operational structure, and risk management strategies.

Minimum Capital Requirement
Ensure sufficient paid-up capital as stipulated by Labuan FSA, depending on the scope and scale of the digital asset business.

Fit and Proper Test
Directors and senior management must meet Labuan FSA’s “fit and proper” standards, which assess their integrity, financial soundness, and industry experience.

Compliance Officer
Appoint a designated compliance officer responsible for overseeing the company’s adherence to AML/CTF regulations and ensuring all reporting obligations are met.

Cybersecurity Standards
Ensure that robust cybersecurity measures are in place to protect customer assets, prevent data breaches, and safeguard against fraud and theft.

AML/CTF Compliance
Implement robust Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) policies, including Know Your Customer (KYC) procedures, to ensure transparency and reduce illicit activity.

Cybersecurity
Demonstrate that adequate cybersecurity measures are in place to protect client funds, data, and operational infrastructure from cyber threats.

Physical Presence
Establish a physical office or maintain a registered address in Labuan to comply with local regulations.

Regulatory Reporting
Licensed entities are required to submit regular reports to Labuan FSA on their operations and financials to ensure compliance with local laws.

Ongoing Audits
Licensed firms must undergo regular audits to ensure they continue to meet Labuan FSA’s regulatory standards.

Insurance Coverage
Maintain insurance coverage to protect against risks such as cyberattacks, fraud, or loss of client assets.

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