What is a VASP under FATF?

A VASP, or Virtual Asset Service Provider, is any business that exchanges, transfers, or custodies virtual assets for others.

TL;DR

TL;DR: FATF defines a VASP as a business that exchanges, transfers, or safekeeps virtual assets, and expects VASPs to run AML and sanctions screening programs.

The definition

Under FATF guidance, a Virtual Asset Service Provider is a business that conducts activities like exchanging virtual assets for fiat or other assets, transferring virtual assets between parties, or holding them in custody. The defining feature is acting on behalf of another person, not merely using crypto for yourself.

What VASPs are expected to do

FATF expects VASPs to implement anti-money laundering and counter-financing-of-terrorism programs, which include sanctions screening. That means checking counterparties against lists like OFAC's SDN List before processing transactions, and applying rules like the 50 Percent Rule.

Putting it into practice

For a VASP, screening is an operational requirement, not a nice-to-have. SanctionsAI gives VASPs a screening API that returns clean or flagged in under 100 ms, covering 947 OFAC-listed wallets and 19,218 SDN names across 16 jurisdictions, synced hourly, with tools like sanctions_check and risk_score.