Virtual Asset Service Providers (VASP) refer to platforms or entities that facilitate financial activities involving transactions made in digital assets. These include money transfers, the exchange of assets from virtual assets to fiat currencies, and the storage and sale of these assets.
The term was created by the Financial Action Task Force (FATF) to identify companies offering crypto-related services. VASPs can be any provider that engages in activities related to the management of virtual assets on behalf of a person or a business.
One example of VASP could be a centralized exchange that ensures the safekeeping of a user’s digital assets while facilitating crypto and fiat transactions. Even mining pools could be considered VASPs since some of them have mining leaders that transmit mining rewards to their pool members.
The FATF introduced strict new guidance for VASPs in June 2020 with the adoption of its Recommendation 16 “Travel Rule”, which obligates countries to ensure that their VASPs share beneficiary and recipient data with counterparties during transactions.