DeFi protocol frontend 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.

VT Transfer Service Provider: A person who facilitates the transfer of VT Tokens on behalf of a third party. This can also encompass aspects of payment processing.

Due Diligence Act (DDA) (Sorgfaltspflichtgesetz):

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.

Identification and Verification of the Customer and UBO:

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.

Exchanges: Provide services for the exchange of virtual assets against fiat currency or other virtual assets.

Transfer Service Providers: Perform virtual asset transfers.

Definition of TT Custodian: According to Art. 4 para. 1 lit. e TVTG, a TT Custodian is "a service provider who holds tokens in custody for third parties and provides services for the safeguarding of private keys or other means of access to tokens."

Licensing Process: Any entity wishing to act as a TT Custodian must obtain prior authorization from the FMA. The requirements for obtaining a license as a TT Service Provider are outlined in Articles 12-17 of the TVTG and include:

Minimum Capital Requirements: As per Art. 17 TVTG, TT Service Providers, including TT Custodians, must have a minimum capital of CHF 100,000. The FMA may require higher capital based on the scope and risk of the services provided.

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.

Outcome: Public notification of unauthorized activity, demand for cessation of operations in Liechtenstein, consumer protection.

Issuing public warnings against unauthorized entities.

Issuing cease-and-desist orders.

MiCA Implementation: MiCA is a comprehensive EU regulation for crypto-assets that will become fully applicable in phases, with most provisions for crypto-asset service providers (CASPs) applying from December 30, 2024.