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Why a Luxembourg VASP Registration?

Understanding VASP licensing and registration

VASPs play a crucial role in the virtual asset space, offering services such as cryptocurrency exchanges, wallet providers, and other platforms facilitating virtual asset transactions. To ensure the integrity of the financial system and mitigate the risks associated with money laundering and terrorist financing, VASPs must adhere to licensing and registration requirements.

Luxembourg as a jurisdiction of choice

There are several advantages to obtaining a Virtual Asset Service Provider (VASP) license in Luxembourg:

  • Stable regulatory framework: Luxembourg provides an attractive environment for fintech firms with its stable regulatory frameworkThe CSSF (Commission de Surveillance du Secteur Financier) is the regulator overseeing VASPs, providing clear guidelines and a defined registration process.

  • Access to EU market: As an EU member state, a VASP licensed in Luxembourg can easily provide services across the European Union.

  • Established financial center: Luxembourg is a global financial, investment and payments hub.

  • Potential for banking relationships: While challenges remain, Luxembourg-licensed VASPs may have an easier time establishing banking relationships compared to lesser regulated jurisdictions, which is crucial for running operations smoothly.

Licensing and registration requirements for VASPs

In line with FATF Recommendation 15 and the FATF Virtual Asset Guidance, VASPs are required to obtain a license or registration in the jurisdiction(s) where they are created. This article aims to provide an in-depth understanding of the licensing and registration process, with a particular emphasis on Luxembourg's new VASP regime.

Obtaining a license or registration

To obtain a license or registration, VASPs typically need to submit an application witht the CSSF. The application process involves providing detailed information about the VASP's business operations, key personnel, AML/CFT policies, and risk mitigation strategies. The competent authority evaluates the application and conducts thorough due diligence before granting the license or registration.

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