AML/CFT Act minimum standards for VASPs

Industry minimum standards of VASPs under the AML/CFT Act (Sept 2021)

Virtual asset service providers or “VASPs” function as gatekeepers to the cryptocurrency market, by enabling users to exchange fiat currency or cryptocurrencies for other cryptocurrencies and vice versa. 

In accordance with the Financial Action Task Force’s (FATF) recommendations for the regulation of virtual assets and VASPs, VASPs are captured by the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) as reporting entities.  VASPs generally fall under the Department of Internal Affairs’ (DIA) jurisdiction although there is scope for them to be within the Financial Markets Authority’s (FMA) remit instead. 

As reporting entities under the AML/CFT Act, VASPs must comply with the AML/CFT Act in the same way that banks, other financial institutions and non-financial entities comply with the regime.  VASPs must conduct customer due diligence on all customers, which includes verifying their customers’ identity.  VASPs must also determine the source of funds or the source of wealth of high-risk users (in addition to other instances prescribed under the AML/CFT Act), and report suspicious activities and prescribed transaction to the New Zealand Financial Intelligence Unit.   

BlockchainNZ has prepared a high-level and inexhaustive summary of the minimum standards VASPs should consider meeting in order to comply with the AML/CFT Act – the minimum standards are available here.

This document is made available for information purposes only and it cannot be relied on as advice of any kind.  We recommend speaking to your adviser if you believe your business may be considered a VASP under New Zealand law or if you would like to know the obligations of a VASP under New Zealand law.