VASP vs CASP: Key Differences for EU Crypto Operators

As the European crypto market matures under MiCA (Markets in Crypto-Assets) regulations, understanding the distinction between VASP (Virtual Asset Service Provider) and CASP (Crypto-Asset Service Provider) is essential for any company planning operations in the EU. These two classifications define regulatory obligations, licensing requirements, and market opportunities for crypto businesses.

What is a VASP?

A VASP is a provider of virtual asset services under FATF (Financial Action Task Force) recommendations. VASPs include businesses offering:

• Crypto exchanges
• Custody of crypto-assets
• Execution of orders
• Transfer of virtual assets
• Issuance or sale of tokens

VASP regulations primarily focus on AML/KYC compliance, transaction monitoring, and reporting obligations. While widely recognized internationally, VASP status does not automatically grant EU-wide legal authorization.

What is a CASP?

A CASP is a licensed entity under EU MiCA regulations, authorized to provide crypto-asset services within the European Economic Area (EEA). CASPs cover similar activities to VASPs but require full MiCA-compliant authorization, including:

• Regulatory approval by an EU authority (e.g., CSSF in Luxembourg)
• Minimum capital requirements (ranging €50,000 – €150,000+)
• Formal governance structure with qualified directors and compliance officers
• Operational presence within an EU member state
• Full AML/KYC and risk management compliance

CASPs can passport their license across the EU, allowing seamless cross-border operations — a key advantage over VASPs.

Key Differences Between VASP and CASP

• Regulatory Framework — VASP: FATF Recommendations (global guidance) / CASP: EU MiCA Regulation (binding EU law)
• EU Licensing — VASP: No EU license required / CASP: Mandatory CASP authorization
• Capital Requirements — VASP: Variable; usually none mandated / CASP: €50,000–€150,000+, depending on service type
• Operational Presence — VASP: Can operate remotely in many jurisdictions / CASP: Functional presence in an EU member state required
• Cross-Border Operations — VASP: Limited; may need local approvals / CASP: EU passporting across EEA countries
• Compliance Focus — VASP: AML/KYC and transaction monitoring / CASP: AML/KYC, governance, cybersecurity, internal audit
• Investor & Bank Confidence — VASP: Moderate / CASP: High, due to formal licensing and regulatory oversight

Implications for EU Crypto Operators

1. Strategic Planning: Companies aiming for long-term EU expansion must evaluate CASP licensing early, especially for exchanges and custody services.
2. Investor Confidence: CASP authorization enhances credibility with banks, PSPs, and institutional investors.
3. Legal Security: Operating as a VASP without CASP authorization in the EU may expose the company to regulatory fines and operational restrictions.
4. Compliance Complexity: CASPs face more structured compliance obligations, including internal audits, IT security protocols, and annual reporting.

FAQ — VASP vs CASP in the EU (2026)

Can a VASP operate legally in the EU without a CASP license?

• Only temporarily. Post-MiCA transition periods, most activities require CASP authorization.

Does a CASP license cover all VASP obligations?

• Yes. CASPs comply with FATF VASP recommendations plus MiCA-specific rules.

What is the typical timeline for CASP licensing?

• 3–6 months, depending on documentation and capital readiness.

Do CASPs need local directors in the EU?

• Yes, functional presence and decision-making within an EU member state are mandatory.

Why EU Crypto Operators Should Choose CASP

• Full MiCA compliance
• EU passporting rights across EEA countries
• Enhanced investor and banking confidence
• Clear governance, risk management, and cybersecurity standards
• Suitable for exchanges, custodians, token issuers, and fintech projects