FATF VASP – Regulations, Compliance and Licensing

When working with FATF VASP, a Virtual Asset Service Provider that must meet the Financial Action Task Force’s anti‑money‑laundering standards. Also known as crypto service provider, it operates under global AML compliance, procedures that detect and prevent money‑laundering and terrorist financing and must secure a valid crypto licensing, government‑issued permission for VASPs to operate legally in a specific jurisdiction. The FATF framework (FATF VASP) requires each provider to conduct customer due‑diligence, monitor transactions, and report suspicious activity; this is a direct semantic link: **FATF VASP** requires AML compliance. In practice, the licensing process often mirrors the AML checklist, creating a second triple: Crypto licensing influences FATF VASP registration. Finally, sanctions enforcement, screening against OFAC, EU and UN watch‑lists to block illicit actors adds a third connection: Sanctions enforcement shapes VASP obligations. Together these pillars form the compliance backbone that any VASP must build before launching services, and they set the stage for the deeper dives below.

Key Compliance Areas for VASPs

First, the risk‑based approach demanded by the FATF means VASPs cannot use a one‑size‑fits‑all checklist. They must assess client risk, geographic exposure, and product complexity, then tailor their AML policies accordingly. This is why many providers adopt automated monitoring tools that flag large, uncommon, or cross‑border flows in real time. Second, licensing regimes differ widely: some countries, like Malta, offer a streamlined CASP (Crypto‑Asset Service Provider) license; others, like the United States, require a Money Services Business (MSB) registration plus state‑level money‑transmitter licenses. Understanding these nuances is essential because a license from one jurisdiction does not automatically transfer to another—each regulator expects proof of FATF‑aligned controls. Third, sanctions enforcement has become a daily operational task. VASPs must integrate robust watch‑list APIs, keep them updated, and train staff to recognize high‑risk patterns such as rapid token swaps or layered transfers that hide the ultimate beneficiary. Ignoring any of these elements can trigger hefty fines, asset freezes, or even criminal prosecution, as recent cases have shown where non‑compliant exchanges faced multi‑million‑dollar penalties.

Below you’ll find a curated collection of articles that break down each of these topics. From step‑by‑step licensing guides for Malta’s MFSA to practical advice on building AML monitoring pipelines, the posts give you actionable insight you can apply right away. Whether you’re a startup founder, a compliance officer, or just curious about how VASPs stay on the right side of the law, the content that follows will help you navigate the fast‑moving regulatory landscape with confidence.