Crypto-funded debit card in Liechtenstein

Definition under TVTG: A "VT Exchange Service Provider" is a person who facilitates the exchange of VT Tokens against fiat currencies or other VT Tokens. This covers traditional cryptocurrency exchanges.

Requirement: Registration with the FMA as a VT Exchange Service Provider is mandatory.

VT Key Depository: A person who holds private keys for clients or is responsible for their storage.

VT Protector: A person who holds VT Tokens in its own name for the account of a third party (client).

VT Payment Service Provider: The TVTG explicitly defines a "VT Payment Service Provider" as a person who provides payment services involving VT tokens or virtual currencies.

Traditional Payment Services: If the payment processing involves fiat currency and falls under the scope of traditional payment services (e.g., electronic money issuance, payment initiation, account information services), it may also fall under the Payment Services Act (Zahlungsdienstleistungsgesetz - ZDG), which implements PSD2 in Liechtenstein, and require a separate payment service license from the FMA.

Token and VT Service Provider Act (TVTG) / Blockchain Act:

Due Diligence Act (DDA) (Sorgfaltspflichtgesetz):

Regulator Name: Financial Market Authority (FMA) Liechtenstein

Issuing public warnings against unauthorized entities.

Withdrawing or refusing licenses for non-compliance.

Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Terrorist Financing (Due Diligence Act, Sorgfaltspflichtgesetz - SPG): This is the overarching AML/CFT law that sets out the due diligence obligations for all financial intermediaries, including VASPs.

Ordinance on Professional Due Diligence (Sorgfaltspflichtverordnung - SPV): This ordinance provides detailed implementing provisions for the Due Diligence Act.

Identification and Verification of the Customer and UBO:

For natural persons: Obtain and verify the identity of the customer by requiring official identification documents (e.g., passport, national ID card) and verifying their name, date of birth, nationality, and residential address.

For legal entities (companies, foundations, trusts): Obtain and verify the entity's name, legal form, registered address, registration number, articles of association, and the identities of directors/executives. Crucially, VASPs must identify and verify the Ultimate Beneficial Owner (UBO), which typically means identifying any natural person who directly or indirectly owns or controls 25% or more of the entity, or otherwise exercises control.

Proof of Address: Often required (e.g., utility bill, bank statement).

Screening: Customers and their UBOs must be screened against national and international sanction lists (e.g., UN, EU, OFAC) and politically exposed persons (PEP) lists.

Understanding the Purpose and Intended Nature of the Business Relationship:

Source of Funds (SoF) / Source of Wealth (SoW):

VASPs must continuously monitor the business relationship, including transactions, to ensure that the activities are consistent with their knowledge of the customer, their business, and risk profile.

E-Money Act (EMoG) (E-Geld-Gesetz): Implements the EU E-Money Directive, regulating the issuance of electronic money. This is highly relevant for fiat-backed stablecoins.

Payment Services Act (ZDG) (Zahlungsdienstgesetz): Implements the EU Payment Services Directive (PSD2), regulating payment services.

E-Money Issuer License (under EMoG):

1:1 Backing: E-money issuers are required to safeguard all funds received in exchange for e-money. This means maintaining a 1:1 backing of the e-money issued with corresponding assets (typically fiat currency).

Segregation: These funds must be held in segregated accounts at credit institutions or invested in secure, low-risk assets (e.g., government bonds) that are also segregated and cannot be used by the issuer for other operational purposes.

Entity Targeted: Licensed TVTG service providers or other financial institutions. (Specific names are not always publicly disclosed for every action, but the FMA's annual reports provide aggregated data). Violation Type: Non-compliance with the TVTG, Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regulations, or other prudential requirements. Penalty Amount: Not a direct public monetary fine, but the severe penalty of loss of operating license, resulting in the inability to conduct regulated activities in Liechtenstein. This represents significant financial loss and reputational damage for the entity. Outcome: Withdrawal of authorization, cessation of regulated activities, safeguarding market integrity.

Entity Targeted: Various companies identified for unauthorized operation, often involving crypto/token offerings. (Specific company names are usually listed on the FMA's warning page, which is regularly updated). Violation Type: Operating financial services or token services without the necessary license under the TVTG or other relevant financial market laws, often coupled with allegations of scams or misleading information. Penalty Amount: Not a direct monetary fine imposed by the FMA in this context, but rather a public warning and expectation of cessation of activity. Failure to comply can lead to further legal action. Outcome: Public notification of unauthorized activity, demand for cessation of operations in Liechtenstein, consumer protection.