VASP license
A VASP license is essential for conducting legal and secure operations in the virtual assets space. Gofaizen & Sherle provides comprehensive support for acquiring a VASP license in top-tier jurisdictions worldwide. Contact us for a consultation and a tailored licensing strategy for your business.
VASP license (Virtual Asset Service Provider) is a mandatory authorization for companies dealing with virtual assets such as cryptocurrencies and tokens.
Introduced by the Financial Action Task Force (FATF), the term VASP refers to virtual asset service providers whose activities are related to financial transactions where protection against illicit schemes and compliance with international security standards are important. The VASP license, like the CASP license adopted in the European Union under the MiCA regulation, allows companies to legally provide services related to crypto-assets and ensures customer confidence by regulating interactions in the virtual asset sector. We help clients prepare all the necessary documents and meet the requirements to apply for a VASP license successfully.
Who needs a VASP license?
A VASP license is required for companies that provide financial services using virtual assets. However, this does not mean licensing is required for all electronic financial services. For example, companies that offer digital wallets or advisory services without being directly involved in the trading and exchange of cryptocurrencies can operate without obtaining this authorization.
Specifically, a VASP license (aka crypto license) is required for the following activities:
- cryptocurrency exchanges – companies that offer spot trading of cryptocurrencies, contract for difference (CFD) transactions and coin sales;
- services for exchanging cryptocurrencies for traditional currencies – platforms that allow the exchange of cryptocurrencies for fiat money, such as euros or dollars, and vice versa;
- platforms for sending virtual assets – organizations involved in transferring cryptocurrencies between users;
- cryptocurrency storage and management services – companies offering customers wallets and other solutions for securely storing digital assets;
- ICOs and issuance of new tokens – companies that organize Initial Coin Offering to raise funds to create new cryptoassets.
These activities require a VASP license to ensure the security of operations and compliance with international anti-money laundering (AML) and counter-terrorist financing (CTF) standards. The license confirms that the company is operating legally and following established regulations to protect against financial abuse.
Request more information about the VASP license
Regulatory requirements for a VASP license
Over the past few years, VASP regulation has moved beyond anti-money laundering. Today, government agencies take a comprehensive approach to ensuring financial stability. In order to obtain a license, companies need to comply with a number of regulatory requirements that ensure transparency, security, and legality of transactions with virtual assets.
The main requirements can be divided into several categories:
- Compliance with AML and KYC regulations.
One of the main conditions for licensing is to have anti-money laundering (AML) and customer knowledge (KYC) policies in place. Companies need to develop comprehensive measures to verify customer identity, assess transaction risks, and monitor suspicious activity.
- Financial strength.
A VASP license requires that companies meet strict capital and liquidity requirements. This includes financial statements that demonstrate the company’s accurate financial condition, maintaining sufficient capital and liquid assets to cover potential losses.
- Risk management and cybersecurity.
Companies are required to implement procedures to protect against cyber threats, as well as risk management systems to prevent fraud and market abuse. This helps protect customer assets and ensure data security.
- Organizational structure and business practices.
Organizational structures should be aligned to effectively manage operations and internal controls. Important aspects include ethical practices, accounting transparency, and the segregation of client assets from company assets.
These requirements are designed to ensure that companies receiving a VASP license meet international standards, maintain high ethical standards, and protect the interests of clients and the financial system as a whole.
Registration process a VASP license
Each country has specific requirements for the application process and conditions for obtaining a VASP license. For example, in Ireland, the Central Bank requires pre-registration meetings where key issues are discussed and preliminary information from applicants is verified. In many other countries, including Austria, the entire application process is automated and conducted through an online portal. Because regulations can vary significantly from jurisdiction to jurisdiction, the steps outlined here provide only a general overview of the VASP licensing process. For an accurate understanding of the process and requirements, please consult our lawyers. In general terms, the process for obtaining a VASP license includes:
Choosing a jurisdiction.
Stage 1
Determining the country for company registration plays an important role, as each state has its own requirements, as well as peculiarities of the legal environment, approaches to regulation, and licensing of cryptocurrencies.
Preparation of required documents.
Stage 2
The application package should include a detailed business plan describing the target market and financial projections, the company’s AML/KYC policies, risk mitigation analysis and plan, information on the company’s management team, and financial statements confirming the sustainability of the business.
Implementation of AML/KYC measures.
Stage 3
To prevent money laundering and terrorist financing, a company must establish robust customer due diligence (CDD) procedures, transaction monitoring, and suspicious transaction reporting systems and maintain complete records of transactions and customer data.
Application Filing.
Stage 4
Once the documents are prepared, the application is filed with the regulatory authority of the chosen jurisdiction. This step may include a filing fee, review and evaluation of the application by the authority, and possible requests for additional information or clarification.
Ongoing compliance and reporting.
Stage 5
Once licensed, the company must submit regular reports related to finances and AML/KYC measures, undergo compliance reviews, and update internal procedures to mitigate new risks.
Summary
Our firm provides professional legal assistance to clients seeking to obtain Virtual Asset Service Provider (VASP) licenses. We assist at every step of this process by offering the following services:
- Regulatory and legal framework analysis.
We offer our clients a detailed review of the applicable laws and regulations regarding VASP licensing in the chosen jurisdiction. This includes not only reviewing the basic requirements but also current changes in the law so that our clients are always aware of important regulatory aspects.
- License Application Preparation.
Our team works to create a thorough application package that complies with all established regulations and regulatory requirements. We assist with the preparation of all required documents, including organizational charts, risk management strategies, and anti-money laundering (AML) and counter-terrorist financing (CTF) procedures.
- Interaction with regulatory authorities.
We act as the client’s representative in negotiations with regulators, ensuring a smooth and efficient application process. Our team is available to respond promptly to requests for additional information or documentation, significantly reducing the risk of delays.
- Ensuring Compliance.
We provide our clients with virtual and real office set-up services and can also offer AML specialist services. Our company also provides local representation and a contact person to interact with the authorities, which is necessary to fulfill all legal requirements.
By working with us, clients can expect a simplified and efficient process of obtaining a VASP license, allowing them to operate in compliance with legal regulations and safely develop their virtual asset business.
