Foreign cryptocurrency companies exploiting Vanuatu’s regulatory environment are tarnishing the nation’s reputation and undermining the legitimacy of its digital asset sector. A notable example is the Lithuanian crypto project Bankera, which, after raising tens of millions through an initial coin offering (ICO), saw its co-founders channel over €45 million to a Vanuatu-based bank they had acquired. Subsequently, this bank issued substantial loans to entities owned by the same individuals, facilitating the purchase of luxury properties across Europe—all while investors suffered significant losses.

Such incidents highlight the vulnerabilities in Vanuatu’s financial oversight, where foreign entities can exploit lax regulations to conduct questionable activities. The Vanuatu Financial Services Commission (VFSC) has issued warnings about fraudulent organizations misusing the credentials of licensed Vanuatu brokers, emphasizing the need for investors to exercise due diligence. Financial Markets Association of Vanuatu

The proliferation of these schemes not only jeopardizes investor trust but also risks Vanuatu being perceived as a haven for financial misconduct. To safeguard its financial integrity and international standing, Vanuatu must strengthen its regulatory frameworks, enhance transparency, and ensure rigorous enforcement against such malpractices.