VASP compliance involves adherence by Virtual Asset Service Providers to regulatory requirements, primarily anti-money laundering and counter-terrorist financing rules. VASPs, such as cryptocurrency exchanges and custodians, must implement robust Know Your Customer (KYC) procedures, monitor transactions for suspicious activity, and report relevant information to financial intelligence units. These obligations stem from international standards set by bodies like the Financial Action Task Force (FATF). Compliance ensures the digital asset sector operates within established financial integrity frameworks.
Context
The global regulatory landscape for VASP compliance is rapidly evolving, with jurisdictions worldwide adopting or refining rules to address the specific risks associated with virtual assets. A significant challenge involves the “Travel Rule,” which mandates VASPs share originator and beneficiary information for transactions above a certain threshold. Future regulatory frameworks aim for greater harmonization and technological solutions to facilitate VASP compliance across diverse operational models.
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