What Is a VASP? Virtual Asset Service Providers Explained
VASPs are regulated crypto businesses. Here is what the legal definition means, who qualifies, and what obligations come with VASP status.
Virtual Asset Service Provider (VASP) is the regulatory category used by the Financial Action Task Force (FATF) — the global AML standard setter — to capture crypto businesses that provide services to the public. Being classified as a VASP triggers comprehensive AML/KYC obligations and in most jurisdictions requires licensing.
Who Qualifies as a VASP?
- Exchange services: converting crypto to fiat or crypto to crypto for customers
- Transfer services: executing crypto transactions on behalf of customers
- Custody: safeguarding crypto assets or private keys for third parties
- Participation in ICOs/token sales: facilitating token issuance or sale
- Financial advisory services: providing crypto investment advice for compensation
What VASPs Must Do
- Register or license: with the local financial regulator before operating
- KYC all customers: identity verification before providing services
- AML program: transaction monitoring, suspicious activity reporting, sanctions screening
- Travel rule: share originator and beneficiary information for transfers above thresholds
- Record keeping: maintain transaction records for minimum 5-6 years
- Reporting: file Suspicious Activity Reports (SARs) when required
Does This Affect You As a User?
As a user of Steyble (a licensed VASP), VASP regulation affects you primarily through KYC requirements at onboarding and potentially enhanced due diligence for large transactions. These obligations protect you: regulated VASPs must segregate customer assets, maintain minimum capital, and provide consumer protection mechanisms. Choosing a regulated VASP rather than an unregistered platform significantly reduces your risk.