Understanding virtual asset service providers

What are virtual asset service providers (VASPs)?





Virtual asset service providers have been defined as a new financial sector facing significant money laundering and terrorist financing risks.


The Financial Action Task Force (FATF) issued its guidance (2019) on how virtual asset service providers could be abused by criminals and terrorists to launder money and finance terrorist acts.


As of March 2021, the FATF has issued a new consultation to amongst others, provide more clarity on which businesses are undertaking VASP activities and are subject to the FATF Standards


 

Remember as a VASP you will need to:


  • Implement the same preventive measures as financial institutions, including customer due diligence, record-keeping, and reporting of suspicious transactions

  • Obtain, hold and securely transmit originator and beneficiary information when making transfers

  • Must know who your customers are

  • Keep adequate and up to date records aligned to record-keeping requirements

  • Ensure a framework is in place to report transactions where suspicions of money laundering or terrorist financing remain

  • Securely and confidentially transmit customer information when sending a payment to another virtual asset provider


These are also covered in FATF Recommendations 10 and 16


If you are a Virtual Asset Service Provider or plan to set up as one, you must ensure you can comply with the FATF requirements.


 

At MEMA we support VASPs in understanding and implementing their regulatory requirements.