Complying with regulatory standards is crucial for businesses in the crypto space. One step to operating legally in Europe is obtaining a Virtual Asset Service Provider (VASP) license or registration. If you’re a crypto service provider who wants to expand your services in Europe, here’s what you need to know about VASP licenses or registrations and how you can obtain one.
What is a VASP Crypto License or Registration?
A VASP license or registration is a regulatory requirement for businesses engaging in virtual asset-related activities, such as crypto transactions. The license or registration ensures that businesses operate transparently, securely, and in compliance, among the others, with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
The VASP license or registration covers the following activities:
- Sending virtual assets
- Exchanging different virtual assets
- Exchanging crypto for traditional currencies (i.e. euros) and vice versa
- Storing and managing virtual assets
- Participating in and providing financial services related to the issuance and sale of virtual assets
How to Obtain a VASP License or Registration in Europe
The information below is just a general overview of applying for a VASP license or registration in Europe. Please reach out to a legal practitioner for a more precise explanation of the process and specific requirements.
1. Select a Jurisdiction and Study The Requirements.
European countries have different regulatory authorities, guidelines, and processes for VASP licensing. Some factors you can consider when choosing a jurisdiction include the regulatory environment, application process, ongoing compliance requirements, and business environment. Some jurisdictions are known for being more crypto-friendly, which might simplify the licensing process.
Consult the official website of the relevant authority, and/or reach out to a legal advisor to select the most suitable jurisdiction for you and ensure compliance.
2. Prepare the Required Documents.
As mentioned, the documents required for VASP licensing usually may vary by jurisdiction, but generally, these include:
- A detailed business plan outlining your operations, target market, and financial projections
- The company’s comprehensive AML and CTF policies and procedures
- Assessment of the risks associated with the business and how you plan to mitigate them
- An outline of the company's management, including their qualifications and work experiences
- Audited financial statements to demonstrate the financial health of your business
- The details of your internal control mechanisms to ensure compliance with regulatory requirements.
3. Implement Robust AML/CTF Measures.
One of the primary objectives of VASP regulation is to prevent money laundering and terrorist financing. Therefore, implementing thorough AML/CTF measures is crucial for your application. These measures should include:
- Customer Due Diligence (CDD) procedures for verifying the identity of customers and assessing their risk profile
- Systems for monitoring transactions to detect suspicious activity
- Reporting suspicious transactions to the relevant authorities
- Keeping comprehensive records of transactions and customer information
4. Submit Your Application.
Submit your application to the relevant regulatory authority once your documents are ready, and upon implementing the required measures,. The application process usually involves:
- Submitting the application form along with the required documentation
- Paying for the application fee, which varies by jurisdiction
- Review and assessment by the regulatory authority. They may also request additional information or clarification
- Grating of the VASP license or registration (if your application has met all the requirements)
5. Ongoing Compliance and Reporting.
Obtaining a VASP license or registration is not a one-time process. Licensed VASPs must maintain ongoing compliance with regulatory requirements, which include:
- Submitting regular reports to the regulatory authority, including financial statements and AML/CTF reports
- Undergoing periodic compliance audits to ensure adherence to regulatory standards
- Continuously monitoring and updating your AML/CTF measures to address emerging risks
Ka.app’s VASP Registrations in Europe
Ka.app has two VASP registrations in Europe—in Italy and Bulgaria—allowing us to legally provide custodial crypto wallet services in the region. These include buying crypto with SEPA, selling crypto, sending, converting tokens, issuing and locking up KASTA tokens, issuing a crypto IBAN account, distributing a crypto debit card, and more.
Ka.app aims to expand its services all over Europe by acquiring more registrations.
FAQs
Why do crypto platforms need a crypto license or registration in Europe?
A VASP license or registration allows crypto platforms to adhere to European legal and regulatory standards, and operate across multiple European jurisdictions, expanding their reach and customer base. Not having a license or registration can lead to severe legal consequences, including fines and shutdowns.
Since the license or registration requires stringent AML and CTF regulations, it also enhances the security and integrity of the platform.
How long does it take to get a VASP license or registration?
The actual time it takes to get a VASP license or registration can vary depending on your chosen jurisdiction, readiness of your documents, and your compliance with application requirements. Generally, the process can take anywhere from a few months to over a year.
How much does it cost to obtain a VASP license or registration?
Again, the cost of obtaining a VASP license or registration varies depending on your chosen jurisdiction and the complexity of the application process and requirements. Be sure to prepare for application fees, legal and consultancy fees, and operational costs, among others.