Luxembourg Registration Process For Virtual Asset Service Providers
The Luxembourg’s Financial Sector Supervisory Authority (CSSF) has issued a statement on April 9 on virtual assets, virtual asset service providers and the related registration process.
Under the law of March 25, 2020 amending the legislation of November 12, 2004 on efforts to combat money laundering and financing of terrorism, the CSSF has been designated as the supervisory authority for virtual assets and virtual asset service providers as defined by Article 1(20c) of the legislation. The CSSF’s role for service providers domiciled in Luxembourg is limited to registration, supervision and enforcement for AML/CFT purposes only. Under articles 1(20c) and 7-1(1) of the AML/CFT law, entities that are established or provide services in Luxembourg must register with the CSSF if they are providing one or more of the following services on behalf of their clients or for their own account :
Exchange between virtual assets and fiat currencies. Exchange between one or more types of virtual asset. Transfer of virtual assets. Safekeeping and/or administration of virtual assets or instruments providing control over virtual assets, including custodian wallet services. Participation in and provision of financial services relating to an issuer’s offer or sale of virtual assets.
As a result, any entity already licensed or registered by a regulatory authority and especially licensed financial institutions that already offers any of these virtual asset services as of March 30, 2020 must fulfil three criteria. They must notify the CSSF promptly by e-mail, submit an application to the CSSF to be registered as a virtual asset service provider at the latest by May 30, and comply with the professional obligations and conditions set out in the AML/CFT law as from March 30.
Any entity already licensed or registered by a regulatory authority and especially licensed financial institutions that intends to offer any virtual asset services starting from March 30 must register in advance as a virtual asset service provider as a VASP and comply with the professional obligations and conditions set out in the AML/CFT legislation.
Reminder….What is an LEI code « Legal Entity Identifier »
The LEI code, a 20-digit unique and universal identifier, was designed to ensure absolute certainty in the identification of legal entities involved in financial transactions. It serves as a basis for establishing counterparty risk monitoring rules and for measuring systemic risk.
Why do I need an LEI code?
All legal entities wishing to sell or buy securities must have an LEI code from January 3, 2018. The concept of legal personality includes all types of companies, associations, foundations and legends and more.
Physical persons are identified with their national identification number and therefore do not have an LEI code.
CSSF has been designated as the supervisory authority for virtual assets and virtual asset service providers.
The statement also notes that the registration requirement for applicants that are established or provide services in Luxembourg does not affect any other licensing, registration or other requirements in Luxembourg, other European or non-EU countries for other activities they may undertake.
The fact that a virtual asset service provider is registered by the CSSF may not, under any circumstances, be described as any kind of positive endorsement by the regulator of the quality of services it offers. Registration, submission of an application or the fact of CSSF AML/CFT oversight may not be mentioned or used in advertising or any business solicitation.
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