Comparing CASP and VASP: Key Differences in copyright Regulation
Comparing CASP and VASP: Key Differences in copyright Regulation
Blog Article
As copyright regulations become more defined globally, businesses often come across two major terms—CASP (copyright-Asset Service Provider) and VASP (Virtual Asset Service Provider). While they may seem interchangeable, especially for startups, there are critical distinctions between them that affect compliance, licensing, and operations.
Understanding the differences between CASP and VASP is essential for copyright businesses expanding into Europe or aligning with global standards. In this article, we’ll break down the two frameworks, explain their core contrasts, and help you decide which applies to your business.
What Is a CASP?
A CASP is a copyright-Asset Service Provider defined under the European Union’s MiCA (Markets in copyright-Assets) regulation. MiCA is a comprehensive framework that governs copyright-assets, issuers, and service providers across all 27 EU member states.
Under MiCA, a CASP is any business that provides one or more of the following services related to copyright-assets:
Operating a trading platform
Custody and administration of copyright-assets
Exchange of copyright-assets for fiat or other copyright-assets
Execution of copyright transactions on behalf of clients
Portfolio management of copyright-assets
Providing transfer services for copyright-assets
Offering advice or placing copyright-assets
Once licensed in one EU country, a CASP can operate across the EU through passporting rights.
What Is a VASP?
A VASP is a Virtual Asset Service Provider as defined by the Financial Action Task Force (FATF)—an intergovernmental body that sets global standards for anti-money laundering (AML) and counter-terrorist financing (CTF).
According to FATF, a VASP is any entity that:
Exchanges virtual assets for fiat currencies
Exchanges one virtual asset for another
Transfers virtual assets
Safeguards virtual assets or instruments enabling control over them
Provides financial services related to virtual assets
The VASP designation is not legally binding but is used by FATF member countries (like the U.S., UK, Canada, and others) as a regulatory benchmark.
Key Differences Between CASP and VASP
1. Legal Framework and Enforcement
CASP: A legally binding regulatory category under the MiCA regulation within the EU.
VASP: A global recommendation by the FATF, adopted voluntarily by member countries.
This means CASP licensing is enforceable under EU law, while VASP regulations vary by country depending on how they implement FATF guidelines.
2. Geographical Scope
CASP: Applies only to copyright businesses operating in the European Union.
VASP: Recognized globally, with FATF urging all countries to regulate virtual asset providers.
A copyright exchange operating in both the EU and the US may be classified as both a CASP and a VASP under different frameworks.
3. Licensing and Supervision
CASP: Requires a formal license from an EU member state financial authority and must meet specific capital, compliance, and conduct rules.
VASP: Depending on the country, may require registration or licensing. Standards vary widely.
For example:
In the EU: VASP definitions were previously used before MiCA replaced them with CASP.
In the U.S.: VASP-aligned rules are applied via FinCEN as Money Services Businesses (MSBs).
4. AML/KYC Requirements
CASP: Must comply with the EU AML Directive (AMLD) and GDPR, with strict internal controls, customer verification, and transaction monitoring.
VASP: Also expected to follow AML/CFT guidelines, but specifics differ depending on national laws.
CASP regulations integrate AML obligations directly into the licensing process, while VASP requirements may exist as separate obligations under national AML laws.
5. Service Categories and Detail
CASP: MiCA defines specific and detailed service types, ensuring clarity on who must be licensed.
VASP: FATF’s definitions are broader and more general, allowing countries to interpret or expand categories.
MiCA’s granularity helps reduce ambiguity but may require more documentation and operational transparency.
Can a Business Be Both a CASP and a VASP?
Yes. In fact, most copyright businesses operating in multiple jurisdictions will fall under both definitions.
For example:
A copyright wallet service provider headquartered in Germany is a CASP under MiCA.
If that company serves clients in Japan or the U.S., it must comply with VASP-related rules in those countries as well.
It's critical for global copyright businesses to map their regulatory obligations across different regions to avoid penalties or blacklisting.
The Shift from VASP to CASP in the EU
Before MiCA, most EU countries used the FATF’s VASP framework as a basis for copyright regulation. Now, MiCA has replaced the VASP model within the EU with the CASP system.
This shift reflects the EU’s desire to:
Create a unified licensing regime for copyright
Improve consumer protection
Increase regulatory certainty
Attract copyright innovation while maintaining oversight
As a result, copyright companies that were previously registered as VASPs in EU countries must transition to CASP licenses under MiCA starting in 2025.
Final Thoughts
Understanding the difference between CASP and VASP is essential for any copyright business navigating regulatory compliance. While both frameworks aim to reduce illicit activity and promote transparency, CASP is a legally binding, EU-specific license, while VASP is a global guideline subject to national interpretation.
If your business is expanding into Europe, preparing for MiCA and securing your CASP license is no longer optional—it’s the new standard. Meanwhile, for global operations, ensure your services comply with the VASP-related rules in every country you operate.
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