Global Law Experts Logo

Find a Global Law Expert

Specialism
Country
Practice Area
awardsr

Awards

Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

What is a Virtual Asset Service Provider (VASP)?

posted 4 weeks ago

What is a VASP? Definition

Virtual Asset Service Providers (VASPs) are companies engaged in specific activities related to cryptocurrencies and virtual assets, operating under proper registration or licensing to conduct these activities. The scope of activities VASPs perform may include:

  • Exchanging cryptocurrencies or trading virtual assets for fiat currency.
  • Enabling transfers of digital assets between users.
  • Safeguarding or managing virtual assets through custody services.
  • Supporting financial services related to the issuance or sale of virtual assets.

VASPs are defined within the framework introduced by local authorities of different countries, aimed at impose obligation of the identification and regulation of these entities to prevent money laundering, terrorist financing, and other illicit activities.

Licensing and Registration of VASPs

The licensing and registration requirements for VASPs differ significantly across jurisdictions. These variations influence the scope of activities VASPs are permitted to conduct and the regulatory expectations they must meet. Several countries have established specific licensing regimes:

  • Argentina, Seychelles currently have well-established VASP licensing processes.
  • New licensing entities such as Digital Asset Service Providers (DASPs) in El Salvador, Crypto Asset Service Providers (CASPs) in the European Union, and Money Service Businesses (MSBs) in Canada and the USA are emerging as regulators adapt to evolving technologies.

It is important to note that these terms — DASP, CASP, and MSB — refer to the licenses required for engaging in these activities rather than specific organizational forms. Most VASPs operate as Limited Liability Companies (LLCs) or Limited Companies (LTDs), but the licensing provides the regulatory framework under which they can operate. The terminological difference between Virtual Asset Service Providers (VASPs) and Crypto-Asset Service Providers (CASPs), as outlined in the ESMA Guidelines, lies in their scope: “crypto” is more specifically tied to cryptocurrencies and Distributed Ledger Technology (DLT), whereas “virtual” can encompass broader categories such as NFTs, which are excluded from the scope of the new EU MiCA regulation.

Types of VASPs

VASPs encompass a diverse range of entities that deliver various critical services in the virtual asset ecosystem. Their functionalities and services extend across multiple categories, reflecting the dynamic nature of the cryptocurrency landscape. Key examples include:

Cryptocurrency Exchanges

Cryptocurrency exchanges are among the most prominent VASPs. They enable users to trade, buy, and sell cryptocurrencies, often acting as a gateway for newcomers to the crypto world. Many exchanges offer advanced features beyond basic trading, including derivatives trading, staking services for passive income, and margin trading to amplify investment opportunities. Leading exchanges also provide seamless integration with decentralized finance (DeFi) platforms, allowing users to explore the broader blockchain ecosystem.

Wallet Providers and Custodians

Custodian wallet providers are entities that specialize in the secure storage and management of cryptocurrencies on behalf of users, primarily institutions or individuals with significant holdings. These providers offer professional-grade solutions, including insured storage, multi-signature access, and robust compliance measures to ensure the safety and integrity of assets. Custodian wallet providers cater to clients requiring advanced security and regulatory adherence, making them a vital part of the cryptocurrency ecosystem.

Payment and Remittance Services

These VASPs facilitate the transfer of virtual assets for payment purposes, serving as a crucial alternative to traditional banking systems. Their services often emphasize cross-border transactions, enabling faster and more cost-effective payments compared to conventional remittance methods. Many also offer integration with point-of-sale systems, making it easier for businesses to accept cryptocurrency payments in real-time.

Token Issuance Platforms

Another category of VASPs includes platforms that support the issuance and distribution of digital tokens. These platforms cater to initial coin offerings (ICOs), security token offerings (STOs), and non-fungible tokens (NFTs). They provide the necessary infrastructure for token creation, marketing, and distribution, ensuring compliance with relevant legal and regulatory frameworks. This category is particularly vital for projects seeking to raise funds or introduce unique digital assets to the market.

DeFi Aggregators and Liquidity Providers

In recent years, decentralized finance (DeFi) aggregators and liquidity providers have emerged as a vital subset of VASPs. These entities connect users with DeFi protocols, enabling access to lending, borrowing, and yield farming opportunities. By offering tools for liquidity provision, these VASPs empower users to participate actively in decentralized markets, ensuring efficient capital allocation and fostering innovation.

In summary, VASPs play a multifaceted role in the virtual asset ecosystem, addressing diverse user needs from trading and storage to payments and decentralized finance. Their continued evolution reflects the growing complexity and opportunity within the cryptocurrency landscape.

The Regulatory Landscape for VASPs

Global Guidance

The specific focus of the different authorities in different jurisdictions is based on  the regulation of anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks for VASPs. Regulatory expectations often include:

  • Conducting KYC (Know Your Customer) checks to verify customer identities.
  • Reporting suspicious transactions.
  • Maintaining detailed records for audits and investigations.
  • Implementing robust cybersecurity measures to protect assets and sensitive information.
    Regional regulation

The regulatory approaches for VASPs vary widely:

  • European Union: The Markets in Crypto-Assets Regulation (MiCA) provides a comprehensive framework for CASPs, ensuring ethical and secure operations.
  • Canada and USA: MSBs operate under stringent anti-money laundering regulations tailored to virtual asset activities.
  • El Salvador: With the introduction of DASPs, the country has embraced a progressive approach to integrating digital assets into its economy.

Some nations adopt existing financial regulations to cover VASPs, while others restrict or ban specific VASP activities outright.

Evolving Regulatory Trends

As technology advances, so do the regulatory demands. Governments are continuously adapting their frameworks to address emerging challenges and opportunities. VASPs must remain agile, integrating advanced compliance tools and maintaining close collaboration with regulators to ensure adherence to new rules.

Conclusion

VASP definition: Virtual Asset Service Providers (VASPs) are companies engaged in specific cryptocurrency-related activities, operating under the appropriate registration or licensing frameworks required for such operations. The licensing processes and permissible activities for VASPs vary widely across jurisdictions, reflecting the diverse regulatory approaches taken globally. While countries like Argentina, Seychelles, continue to utilize VASP licensing, new licensing categories have emerged in other regions, such as Digital Asset Service Providers (DASPs) in El Salvador, Crypto-Asset Service Providers (CASPs) in the European Union, and Money Services Businesses (MSBs) in Canada and the United States.

These licenses are not tied to specific organizational forms, as most licensed entities are structured as Limited Companies (LLCs or LTDs). Instead, the license denotes the regulatory compliance framework under which these companies operate. This dynamic regulatory environment highlights the crucial role of VASPs in ensuring the safe and transparent integration of cryptocurrencies into the global financial system.

VASP meaning: By securing the appropriate licenses and adhering to jurisdictional requirements, VASPs build trust and confidence among users and regulators.

In conclusion, Virtual Asset Service Providers are not just facilitators but pioneers in a transformative era of financial innovation. By prioritizing compliance, embracing technological advancements, and maintaining an unwavering focus on user needs, VASPs play a crucial role in shaping the future of digital finance. As they navigate the challenges of an evolving regulatory environment, their contributions will pave the way for cryptocurrencies to achieve their full potential, ushering in a new era of financial inclusivity and innovation.

Author

Find the right Legal Expert for your business

The premier guide to leading legal professionals throughout the world

Specialism
Country
Practice Area
LAWYERS RECOGNIZED
0
EVALUATIONS OF LAWYERS BY THEIR PEERS
0 m+
PRACTICE AREAS
0
COUNTRIES AROUND THE WORLD
0

Join

who are already getting the benefits
0
Sign up for the latest legal briefings and news within Global Law Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox. Naturally you can unsubscribe at any time.

Online Casino Reviews

  • Freeroll Poker Tournaments For Real Money
  • Australian Online Casino Real Money
  • Best Slot App To Win Real Money
  • Online Casino Real Money Australia
  • Best Paying Online Pokies
  • Wizard Of Oz Online Slots
  • All Slots Casino Mobile
  • Best Online Poker App Real Money
  • Best Online Casino To Play Roulette
  • Is Online Casino Legal
  • Online Casino That Accepts Paypal
  • Play Roulette For Real Money
  • Slot Apps To Win Real Money
  • Real Money Slots Online Usa
  • Safe Online Casino
  • Wizard Of Oz Slots
  • Real Online Pokies Nz
  • Biggest Online Casino In The World
  • Online Casino Pay With Paypal
  • Online Casino That Accept Paypal
  • Online Casino Canada Real Money
  • 3 Card Poker Online Real Money
  • Online Slots Real Money Canada
  • Best Online Poker Sites For Real Money
  • Real Money Poker App Android Usa
  • How To Make Money From Online Casino Bonuses
  • Real Money Poker App Iphone
  • How To Play Blackjack Online For Real Money
  • Best Slots To Play
  • Top 10 Online Pokies
  • Best Poker Apps Real Money
  • Online Casino Legal
  • Best Payout Online Casino Uk
  • Win Money Online Slots
  • Online Poker Nj Real Money
  • How To Win Online Slots
  • Casino Gaming License
  • Play Real Pokies Online
  • Blackjack Sites For Real Money
  • Real Money Casino Games For Android
  • Best New Online Slots
  • Flaming 777 Slots Games
  • Online Blackjack With Live Dealers
  • How To Play Online Slots
  • Facebook Casino Games Real Money
  • Online Casino With No Minimum Deposit
  • How To Beat Online Slots
  • Online Casino License
  • The Big Payback Slots
  • Royal Vegas Online Casino Withdrawal
  • Online Casino Minimum Deposit 5
  • Online Pokies Real Money Australia
  • Las Vegas Usa Online Casino
  • Real Money Poker App Android
  • Wheel Of Fortune Slots
  • Game Of Thrones Slots
  • Online Poker Real Money Usa Legal
  • Best Online Casino European Roulette
  • Blackjack Online Real Money Paypal
  • Online Video Poker Real Money Usa
  • How To Create An Online Casino
  • Lucky Nugget Online Casino Mobile
  • How To Withdraw Money From Online Casino
  • Platinum Play Online Casino Download
  • Online Casino For Usa Players
  • Best Online Casino Usa Real Money
  • Online Roulette Real Money Usa
  • Best Real Money Poker Sites
  • Android Slots Real Money
  • How To Start An Online Casino Business
  • How To Start An Online Casino
  • How To Start An Online Gambling Site
  • Best Online Casino For Blackjack
  • Play Baccarat Online For Money
  • Online Pokies New Zealand
  • Best Slots To Play At Golden Nugget
  • Slots Of Vegas Online Casino
  • Best Online Pokies Site
  • How To Beat Online Roulette
  • New Zealand Online Pokies
  • Online Poker Mobile Real Money
  • Which Online Slots Payout The Most
  • Is Online Casino Legal In India
  • Online Casino Software For Sale
  • Best Online Casino For Craps
  • Hard Rock Casino Slots
  • Win Real Money Online Pokies
  • Online Casino With Highest Payout Percentage
  • Poker Apps With Real Money
  • Online Roulette Real Money Review
  • Full Tilt Poker Real Money
  • Online Casino 5 Dollar Minimum Deposit
  • Online Roulette With Real Money
  • Best Online Roulette For Real Money
  • I Migliori Casino Online Italiani
  • Best Payout Online Slots
  • How To Play Baccarat Online
  • Play Casino Card Game Online
  • Play Blackjack Online For Real Money
  • Best Paying Online Slots
  • Casino License Cost
  • Online Poker Real Money California
  • Safe Online Casino Australia
  • Online Roulette Australia Real Money
  • Online Poker Real Money Texas
  • Online Roulette Real Money Paypal
  • Online Slots Australia Real Money
  • Golden Nugget Online Casino Review
  • Casino Games To Win Real Money
  • Online Pokies Australia Real Money
  • Online Gambling Blackjack Real Money
  • Win Real Money Playing Slots
  • How To Win Roulette Online
  • Aristocrat Pokies Online Real Money
  • Hollywood Casino Online Slots
  • Play Online Keno For Real Money
  • What's The Best Online Casino
  • Triple Double Diamond Slots
  • Play Roulette Online With Real Money
  • Roulette Online For Real Money
  • Play Roulette Online Real Money
  • Best Online Pokies Real Money
  • Big Red Pokies Online
  • How To Win At Online Blackjack
  • What Is The Best Online Roulette Site
  • Real Money Online Pokies
  • Spin To Win Slots
  • Ruby Slots Online Casino
  • Wheel Of Fortune Online Casino
  • Spin Palace Flash Casino Online
  • Online Poker Real Money App
  • Online Casino With Paypal Deposit
  • How To Win At Online Roulette
  • Can You Win Real Money On Slot Apps
  • Is Ignition Casino Safe
  • Online Casino Blackjack Real Money
  • Online Casino Win Real Money Usa
  • How To Make Money Online Casino
  • Online Casino Real Money Reviews
  • Slot Games To Win Real Money
  • Jackpot City Online Casino Download
  • Online Pokies Real Money
  • Casino War Online Real Money
  • Online Casino No Minimum Deposit
  • Play Wheel Of Fortune Slots Online
  • Best Online Casino Game To Win Money
  • Online Casino Without Wagering Requirements
  • Online Slots For Real Money Usa
  • Legal Online Casino Australia
  • How Do Online Slots Work
  • Best Online Casino For Us Players
  • Online Play Casino Roulette Game
  • Online Blackjack Real Money Australia
  • Real Casino Games Real Money Online
  • Online Slot Machines Real Money Paypal
  • The Best Online Casino For Roulette
  • What Online Casino Pays Out The Most
  • Start Your Own Online Casino
  • Legal Online Casino
  • Online Live Roulette Casino Game
  • Playing Blackjack Online For Real Money
  • Online Penny Slots Real Money
  • Best Online Blackjack For Money
  • How To Win Online Roulette
  • Real Money Poker Sites Usa
  • Best Time To Play Slots
  • Online Keno For Real Money
  • Best Payout Online Slots Uk
  • Online Slots Real Money Reviews
  • Best Online Pokies Nz
  • What States Allow Online Gambling
  • Best Real Money Poker App
  • Online Slots To Win Real Money
  • Real Money Slots App Iphone
  • Jackpot City Flash Casino Online
  • Ignition Casino Legit
  • All Star Slots Casino
  • How To Play Online Casino
  • Real Time Gaming Slots
  • Online Video Poker Real Money
  • How To Play Roulette Online For Money
  • How To Win On Online Slots
  • Age Of Gods Slots
  • Online Real Casino Money Games
  • Best Online Slots To Play
  • Online Poker California Real Money
  • Is Jackpot City Casino Legit
  • How To Win At Online Slots
  • Play Poker For Real Money
  • Safe Online Pokies Australia
  • Best Way To Play Slots
  • How To Play Casino Online
  • Play Online Roulette For Money
  • Online Casino Australia Real Money
  • Which States Allow Online Gambling
  • Play Keno Online Real Money
  • How To Win Online Blackjack
  • Online Blackjack With Real Dealers
  • How To Open Online Casino
  • What Are The Best Online Slots To Play
  • Big Win Casino Slots
  • Spin Palace Online Casino Australia
  • Best Slots To Win On
  • Casino Slots Win Real Money
  • Slots Magic Online Casino
  • Blackjack Online For Real Money
  • Slot Machine App Win Real Money
  • Online Casino Not Paying Out
  • Slots That Pay Out Real Money
  • Online Pokies Australia Reviews
  • Online Casino Minimum Deposit 1
  • Jackpot City Online Casino Review
  • Live Dealer Baccarat Online Casino
  • Online Casino Apps For Android
  • Online Casino Paypal Deposit Australia
  • Online Casino With Live Dealer
  • How To Play Blackjack Online
  • Slots To Win Real Money
  • Wheel Of Fortune Online Slots
  • Play Quick Hit Slots Online
  • Can You Count Cards In Online Blackjack
  • Palace Of Chance Online Casino
  • How To Play Roulette Online
  • Good Slots To Play
  • Which Online Casino Pays Out The Most
  • Heart Of Vegas Casino Slots
  • Best Online Casino For Canadians
  • Australian Online Pokies Real Money
  • Mohegan Sun Online Casino Nj
  • Online Casino Live Games Best Uk
  • Best Online Casino Australia Reviews
  • Play Pokies Online Real Money
  • Best Online Casino For Usa Players
  • How To Win Online Casino
  • Play Blackjack For Real Money
  • Best Slots On Bovada
  • Online Keno Real Money Usa
  • Online Slots Real Money Paypal
  • Best Poker Sites For Real Money
  • Safe Casino Sites
  • The Best Online Slots
  • Play Keno For Real Money
  • Real Online Pokies Australia
  • Queen Of The Nile Slots
  • Mummys Gold Casino Online Casino
  • Play Keno Online For Real Money
  • Best Poker Websites Real Money
  • Lucky Nugget Online Casino Download
  • Best Online Casino For Roulette
  • Play Roulette For Money Online
  • Video Slots Mobile Casino
  • Best Time To Play Online Slots
  • Best Real Money Online Poker
  • Play Blackjack Online With Friends
  • Play Baccarat Online For Real Money
  • Is Silver Oak Casino Legit
  • Big Fish Casino Real Money
  • Can You Win Real Money On Caesars Slots
  • Game Of Thrones Slots Casino
  • Best Online Slots Payout Percentage
  • Play Online Pokies For Real Money
  • Play Pokies Online Australia
  • High 5 Casino Real Slots
  • The Best Online Pokies
  • Online Pokies That Accept Paypal
  • Heart Of Vegas Slots
  • How To Play Online Roulette
  • Best Poker App Real Money
  • Best Online Casino Fast Payout
  • Best Slots At Wind Creek Casino
  • Online Casino 10 Minimum Deposit
  • Play Roulette Online For Money
  • Us Real Money Poker Sites
  • How To Win In Online Casino
  • Best Online Pokies Australia Review
  • Where To Play Roulette Online For Real Money
  • How To Beat Online Casino Slot Machines
  • Highest Payout Online Slots
  • Best Paying Online Casino Slots
  • Golden Tiger Online Casino Review
  • Online Casino With Live Dealers
  • Play Roulette Online For Real Money
  • Best Slots To Play At Casino
  • Slot Machine Games Win Real Money
  • Most Popular Online Casino Games
  • Casino Slots App Real Money
  • Online Casino Real Money Canada
  • Online Real Money Pokies
  • Online Roulette Game Real Money
  • Online Casino Roulette Real Money
  • Best Place To Play Roulette Online
  • Online Casino Book Of Ra Paypal
  • Online Blackjack With Real Money
  • Play Online Blackjack For Real Money
  • Is There A Slot Machine App For Real Money
  • Royal Vegas Online Casino App
  • Best Casino Slots To Play
  • Most Popular Online Slots
  • Best Way To Win At Slots
  • Slots You Can Win Real Money
  • Play Roulette Online Real Money Usa
  • Online Casino Real Money Paypal
  • Online Casino Australia Legal
  • Treasures Of Troy Slots
  • Online Casino For Us Players
  • Where Can I Play Blackjack Online For Real Money
  • Online Casino Paypal Book Of Ra
  • Online Roulette For Real Money
  • Best Online Blackjack Real Money
  • Poker App For Real Money
  • Jackpot Magic Slots Facebook
  • Best Online Casino Real Money Usa
  • Best Online Casino New Zealand
  • The Four Kings Casino And Slots
  • How To Play Slots Online
  • Best Online Pokies Australia
  • Usa Online Slots Real Money
  • Real Money Casino Android App
  • Online Slot Machines That Pay Real Money
  • Online Pokies Real Money Nz
  • Online Pokies Real Money App
  • Play Igt Slots Online
  • Best Casino Slots To Win Money
  • Online Casino Business For Sale
  • Play N Go Slots
  • Poker Apps For Real Money
  • Lucky Slots Real Money
  • All Slots Online Casino
  • Best Online Pokies Real Money Australia
  • Online Pokies Win Real Money
  • Best Online Casinos For Roulette
  • Pay Slots For Real Money
  • Best Online Poker Real Money
  • Slots App Win Real Money
  • Play Online Roulette For Real Money
  • Is Ignition Casino Legit
  • Wheel Of Fortune Slots Online
  • Lotsa Slots Real Money
  • Video Poker Online Real Money
  • Online Slots Usa Real Money
  • Play Blackjack Online Real Money
  • Jackpot City Online Pokies
  • Video Slots Online Casino
  • Is 888 Casino Legit
  • Online Slot Games That Pay Real Money
  • Prepaid Visa Card Online Casino
  • How To Stop Online Gambling
  • Best Slots To Play Online
  • Online Blackjack For Real Money
  • Slot Apps For Real Money
  • Mobile Slots Win Real Money
  • Newsletter Sign Up

    About Us

    Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

    Social Posts

    See More:

    Contact Us

    Stay Informed

    Join Mailing List

    GLE