How does a Virtual Asset Services Provider (VASP) license work? And how difficult is the application process?

Jiří Makovský

Virtual Asset Service Provider (VASP) is an umbrella term that covers licenses related to the cryptocurrency industry worldwide. For example, Belgium, the Republic of Ireland or Greece work with the permit. It is precisely the Greek license that is currently of greatest interest. So let's have a closer look!!

The European Securities and Markets Authority (ESMA) operates within the European Union. Long story short - imagine it as an office similar to the United Nations, but the delegates are not sent by any state, but rather by the national bank or the market commission that falls under it.

Greece has a representative from the Hellenic Securities Market Commission (HCMC). Its task, similar to that of our Czech National Bank, is to control the market environment and capital transactions. This authority, with the blessing of ESMA, operates its very own VASP license issued in Greece, which is passported throughout Europe.

Cryptocurrency regulation in Greece – is it a viable model? 

The Board of the Greek Securities Market Commission has unequivocally agreed on decision 5/898/3.12.2020, which will introduce a pair of registers for companies operating on the cryptocurrency market.

  • Register of escrow wallet providers: Those who want to handle third-party crypto assets in any way must apply for permission and registration. For example, managing wallets on the provider's platform.
  • Register of providers of foreign exchange services between virtual currencies and fiat currencies: A company that wants to offer foreign exchange services applies for a deposit in the register.

Both permissions are closely related to each other. They even share company requirements or registration fees. Many services require both in order to function. 

What are the licensing requirements?

The requirements are quite high. For example, when applying for CASP, you need to prepare not only a whole lot of information but also a fair amount of patience. The process is indeed rigorous.

HCMC has a pair of different conditions for the Greek VASP. Depending on whether the applicant is a natural or legal person. Throughout this article, we will look at the requirements that companies must meet.

What are the conditions for granting a company license?

The Hellenic Securities and Market Commission will conduct a thorough analysis of the applicant.

1) All public knowledge regarding the company

The first thing HCMC will look at is whether the applicant has possibly negative reputation and is registered with the Legal Entities Administration Office in the given state.

The company must provide its registered office, an extract from the register along with the charter or company deed, as well as information and contacts for management. The representative of the company - usually the CEO - must provide a copy of the identity card, passport and his tax number.

All shareholders with a stake above 10% are required to provide the same information as the CEO. If the company has a beneficiary, the same process applies.

2) Extract from the criminal record of the founders, senior management, shareholders and beneficiary

The integrity of the people who manage the company is mandatory.

3) Information about company owners and decision-making structure

The applicant must list their shareholders and how much of the business they own and how much they participate in the company’s decision-making process.

4) Membership in any conglomerate

If the company is part of a business structure in which another company hold power over it, the applicant must clearly disclose these facts.

5) Detailed description of intended services

The HCMC requires an in-depth description of the products that the company wants to market after its registration. Necessity for such details apply not only to the platform but also to all subsequent services within. The actual dates of the launch of individual products must also be stated.

6) Applicant's business plan

  • business goals

  • origin and type of customers

  • employees
  • company management details
  • financial and other resources
  • information on the volume and value of transactions
  • a summary of the main income and associated expenses

The office pays particular attention to whether the company is deemed stable and not at risk of bankruptcy or other imminent danger.

7) Organizational structure

Division of the company and also whether some specific tasks are being outsourced to third parties. For example, if the company does its own marketing or has a contracted agency partner for such services. All details are accounted for.

8) Security level of computer structures

Interestingly, the commission takes the company's IT security very seriously. This is an apparent response to widespread crime in the cryptocurrency industry.

9) Internal control system & anti-money laundering policy

Each applicant must clearly specify plans of compliance with Greek anti-money laundering laws.

10) Evaluation of the risks associated with money laundering and terrorist financing

In accordance with Greek legislation, it is also necessary to submit an analysis that assesses the risks of the service being used for unfair & illegal practices.

11) Declaration

The applicant submits a legally binding declaration that the information provided by him corresponds to reality and actual state of affairs. 

In addition to the conditions above, the company must be prepared for the HCMC to request additional documents. As already mentioned, the commission leaves nothing to chance.

Additional information about the VASP registration process

Last, but not least — we will go through the other details that are based on the Greek law 5/898/3.12.2020 on crypto-service providers.

HCMC must respond within two months from the moment the application is accepted.
The register of administrators of wallets and other platforms is publicly accessible information on the commission's website.

The fee for the application to be entered into the register is €1,500. Also, every year the company pays a maintenance fee of €1,000.