What Is a VASP? Virtual Asset Service Provider Licensing Explained

As digital assets move into the mainstream, regulators worldwide have introduced licensing regimes for the businesses that handle them. If your company touches crypto on behalf of customers, you may be a Virtual Asset Service Provider — and you may need a licence.

What is a VASP?

Drawing on the FATF definition, a VASP is a person or business that, as a commercial activity and on behalf of others, provides one or more of the following services:

• Exchange between virtual assets and fiat currencies;
• Exchange between one or more forms of virtual assets;
• Transfer of virtual assets on behalf of others;
• Custody and administration of virtual assets; and
• Provision of financial services related to an issuer's offer or sale of a virtual asset.

If your business does any of these for customers, it is likely captured — whether you call it an exchange, a wallet, a broker, an OTC desk or a token platform.

Why a licence matters

A licence is increasingly the price of entry. Banks and payment partners ask for it before they will work with a crypto business; institutional clients require it; and operating without one where it is mandated can mean penalties or shutdown. A recognised licence also builds trust with users and counterparties.

The process and timeline

Although details vary by jurisdiction, the path usually follows a familiar shape: structuring and incorporation, preparation of a full application pack (business plan, AML/CFT policies, key-person and fit-and-proper documentation, financials), submission to the regulator, a review and Q&A period, and finally the grant of the licence. With IBONE ASIA, document preparation typically takes from one week to two months, and the regulator's review through to issuance from two weeks to four months, depending on the jurisdiction and the completeness of the file.

Representative success stories

The following anonymised examples illustrate the kinds of engagements IBONE ASIA supports:

• European exchange start-up. A small team needed a credible licence to open banking and onboard institutional users. With a clean corporate structure and a well-documented AML framework, the application was prepared in about six weeks and approved within the regulator's review window.
• OTC trading desk. An existing desk that had been refused banking restructured through a licensed entity, presented clear source-of-funds documentation, and secured both the licence and a banking relationship.
• Wallet & custody provider. A custody-focused business mapped its services to the VASP definition, adopted the required policies and obtained its licence, unlocking partnerships that had previously been out of reach.

Outcomes depend on each applicant's facts; these examples are representative rather than guarantees.