Virtual asset service provider definition

The VASP definition exists to bring exchanges, custodians and transfer services inside the same obligations as banks: identify customers, screen against sanctions lists, keep records, and pass originator and beneficiary information with transfers.

Coverage is uneven across jurisdictions, and that unevenness is the practical point. A transfer that passes through a licensed exchange is screened; the same transfer routed through a service with no customer identification programme is not.

Where this term is used

How is cryptocurrency used to evade sanctions? — Settling obligations in virtual assets so that value moves without a correspondent bank, a payment message or a screening system in the path, and without any institution able to block it in transit.
What are mixers and chain hopping? — Breaking the traceability of on-chain funds by pooling them with other users' funds, or by moving them between blockchains, so that outputs cannot be readily linked to their inputs.
What is stablecoin settlement and why does it matter for sanctions? — Settling commercial obligations in a fiat-referenced token, so that a dollar-denominated trade can be paid without a dollar ever passing through a correspondent bank.

Related terms

Stablecoin — A virtual asset designed to hold a steady value against a reference such as a national currency, usually by holding reserves or by algorithmic mechanism.
Mixer — A service that pools virtual currency from many users and redistributes it, so that outputs cannot be readily linked to the inputs that funded them.
Blockchain analytics — The practice of clustering addresses and attributing them to real-world services or actors, using on-chain patterns and off-chain information.
Know your customer — The obligation on a regulated firm to identify its customer, verify that identity, and understand the purpose of the relationship before providing services.

Where this term is used

Related terms

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