VASP License, Europe
Virtual Asset Service Provider

Introduction

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As cryptocurrency markets evolve, regulatory oversight is increasing to ensure financial stability, investor protection, and anti-money laundering compliance. In the European Economic Area (EEA), businesses providing virtual asset services must obtain a Virtual Asset Service Provider (VASP) licence to operate legally. This applies to crypto exchanges, wallet providers, payment processors, and custodial service providers, ensuring that all virtual asset activities comply with strict financial regulations.

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A VASP licence is now mandatory in most European jurisdictions, with harmonised EU-wide rules under the Markets in Crypto-Assets Regulation (MiCA) coming into force. Some EU countries already require crypto businesses to be licensed under national AML laws, while others will align with the MiCA framework by 2024.

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For businesses seeking regulated status, a VASP licence provides access to banking services, institutional partnerships, and international market expansion. It also ensures full compliance with EU AML directives and FATF Travel Rule requirements, protecting firms from regulatory enforcement actions.

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VASP Licence Overview

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A VASP licence is a legal requirement for any company providing crypto-to-fiat and crypto-to-crypto exchanges, digital wallet services, token custody, and payment processing within the European Union. It ensures that businesses operate within a transparent and secure regulatory framework, protecting consumers and preventing financial crime.

 

The main compliance requirements for a VASP licence include:

• AML and CTF Compliance: Businesses must implement know-your-customer (KYC) verification, enhanced due diligence, transaction monitoring, and suspicious activity reporting to comply with EU anti-money laundering laws.

• Regulatory Approval of Key Personnel: Company directors, compliance officers, and key stakeholders must pass a fit and proper test, demonstrating financial integrity and experience in financial services.

• Operational Risk and Governance Standards: VASPs must maintain risk management procedures, corporate governance policies, and internal security frameworks.

• Secure Custody and Fund Protection Measures: Custodial service providers must implement robust security protocols, including cold storage, multi-signature authorisation, and cyber risk management.

 

Without a VASP licence, businesses will be unable to legally provide virtual asset services, secure partnerships with banks and payment providers, or onboard institutional investors.

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Where to Obtain a VASP Licence in Europe

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Several European jurisdictions offer VASP licences under national AML laws, with MiCA set to introduce a unified EU-wide licensing framework. The choice of licensing jurisdiction impacts processing times, compliance complexity, and ongoing reporting obligations.

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• France: The AMF (Autorité des Marchés Financiers) requires VASP registration under the French AML framework, making it one of the most strictly regulated European jurisdictions.

• Germany: The BaFin (Federal Financial Supervisory Authority) mandates a crypto custody licence, imposing high capital and compliance requirements. Germany has one of the most stringent VASP regulations in the EU.

• Lithuania: The Bank of Lithuania provides one of the fastest and most cost-effective VASP licensing processes, making it a preferred choice for startups and crypto payment processors.

• Estonia: Previously a leading crypto hub, Estonia has introduced stricter AML rules, requiring VASPs to maintain local operations and demonstrate regulatory compliance.

• Malta: The MFSA (Malta Financial Services Authority) has a detailed VASP licensing framework, making it an attractive jurisdiction for businesses seeking long-term regulatory certainty.

 

Once MiCA is fully implemented, VASPs licensed in any EU country will benefit from regulatory passporting, allowing them to operate in all 27 EU member states without requiring additional national licences.

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Step-by-Step Process to Obtain a VASP Licence

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The VASP licensing process varies by jurisdiction, but generally takes between three to twelve months, depending on regulatory complexity and business structure.

 

Step 1: Select the Licensing Jurisdiction
Choosing the most suitable EU country based on business model, compliance complexity, and licensing costs.

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Step 2: Prepare and Submit Application
Regulatory submission includes a business plan, AML/CTF policies, financial disclosures, and governance documentation.

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Step 3: Conduct Fit and Proper Test
Key personnel, including directors, compliance officers, and shareholders, undergo regulatory background checks to ensure financial integrity and compliance expertise.

 

Step 4: Regulatory Due Diligence
The licensing authority assesses the company’s financial standing, AML policies, risk management framework, and IT security measures. Some jurisdictions require on-site inspections before approval.

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Step 5: Licence Approval and Issuance
Once the VASP meets all regulatory conditions, the licence is granted, enabling full compliance and legal operation.

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Step 6: Ongoing Compliance and Reporting
After obtaining the licence, businesses must maintain AML reporting, financial audits, and transaction monitoring to ensure continued compliance.

 

 

How Buckingham Capital Consulting Can Help

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Buckingham Capital Consulting is a leading regulatory advisory firm specialising in VASP licensing, crypto compliance, and financial risk management. With over 15 years of experience, we assist businesses in obtaining VASP licences in key European jurisdictions, ensuring full regulatory approval and operational readiness.

 

Our services include:

• VASP Licensing Strategy: Guidance on jurisdiction selection, regulatory framework analysis, and licensing requirements.

• Regulatory Application Preparation: Drafting and submission of licensing documents, AML/CTF policies, and corporate governance frameworks.

• Compliance and Risk Management Solutions: Development of KYC, transaction monitoring, and cyber risk frameworks to meet EU regulatory standards.

• Regulatory Interviews and Due Diligence Support: Expert advisory for licence applications, regulatory interviews, and audits.

• Ongoing Post-Licensing Compliance: Ensuring continued AML reporting, financial auditing, and risk management compliance.

 

 

Start Your VASP Licence Application Today

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Navigating VASP licensing regulations can be complex, but with expert guidance, your business can achieve regulatory approval efficiently.

Contact Buckingham Capital Consulting today to begin your VASP licence application.