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Liechtenstein’s Regulatory Framework for Cryptoasset Transactions: A Comprehensive Overview
In recent years, Liechtenstein has established itself as a hub for cryptocurrency and blockchain innovation, with a regulatory framework that provides clarity and certainty for market participants. In this article, we will delve into the key aspects of Liechtenstein’s regulatory environment for cryptoasset transactions.
KYC/AML Regulation: A Risk-Based Approach
Liechtenstein’s Due Diligence Act requires all Token Issuers and certain service providers to implement a Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedure. This risk-based approach allows for the application of different rules depending on investment volumes, overall volumes, involved countries, and involved persons.
- For example, Token Issuers must identify all investors who invest more than CHF 1,000 and respect international blacklists and sanction lists.
- Additionally, information regarding the source of funds of each investor must be collected.
Promotion and Testing: EU DLT Sandbox Regime
Liechtenstein has established a special government body responsible for facilitating fintech and blockchain development, as well as a dedicated department within the Financial Market Authority (FMA) focused on cryptocurrency and blockchain regulation. While there is no specific regulatory sandbox in Liechtenstein, the EU’s DLT Sandbox Regime allows for the testing of new technologies with lower regulatory hurdles.
Ownership and Licensing Requirements
There are currently no specific licensing requirements for investment advisors or fund managers holding cryptocurrency, apart from those set out under general financial market law. However, the TVTG creates a legal framework for ownership, possession, and disposition rights over cryptoassets, providing certainty and clarity for market participants.
Licensing Requirements: A Smooth Transition
The rules of the TVTG and TVTV outline the applicable regulation in Liechtenstein for certain service providers related to DLT and cryptoassets. The amendment of the TVG will ensure a smooth transition to the new regulatory framework, which is expected to be implemented shortly.
Conclusion
In conclusion, Liechtenstein’s regulatory environment provides a comprehensive framework for cryptoasset transactions, with a focus on risk-based regulation, promotion and testing, and clear ownership and licensing requirements. As the country continues to evolve as a hub for fintech and blockchain innovation, market participants can be confident in the clarity and certainty provided by its regulatory environment.