Liechtenstein had a comprehensive legal framework for the crypto industry since 1 January 2020, with the entry into force of the Blockchain Act (TVTG). With the amendments to the Due Diligence Act (or SPG) and the Due Diligence Ordinance (or SPV), Liechtenstein created the basis for the application of FATF's crypto travel rule and subsequently provided further guidance to the industry through Instructions that entered into force in August 2021.
Yes, owning and using cryptocurrency for transactions is legal in Liechtenstein. In fact, Liechtenstein Blockchain Act (TVTG) provides a comprehensive framework on the nature of crypto assets and related services.
In Liechtenstein, the Financial Market Authority (FMA) is the entity responsible for supervising financial market participants, including in the crypto industry, and issuing the legal and regulatory foundations for the space.
The Financial Market Authority (FMA) is responsible for regulating and supervising the implementation of the crypto travel rule in Liechtenstein.
Yes. VASPs (or TT Service Providers) in Liechtenstein are subject to the registration requirements foreseen in Art.12 et seq. of the TVTG. The TVTG (Art.19 / 2) sets forth a deadline of three months for the FMA to decide on a complete application for registration as a TT Service Provider.
Yes, the crypto travel rule is mandated in Liechtenstein. The implementation of the FATF travel rule in Liechtenstein was implemented through amendments to the Due Diligence Act, or SPG (dated 1 April 2021) and to the Due Diligence Ordinance, or SPV (in force since 1 June 2021).
Compliance with the travel rule is mandatory for any VA transfers with counterparties that are subject to jurisdictions where full implementation of the travel rule is already required.
However, Liechtenstein foresees a grace period to comply with the travel rule for cases where the transaction involves VASPs subject to jurisdictions that do not yet require full implementation of FATF's travel rule (Chapter 10 of FMA's Instruction), until:
These transactions are subject to enhanced due diligence and risk mitigation measures.
The Crypto Travel Rule is already in effect in Liechtenstein. However, Liechtenstein foresees a grace period for compliance with the travel rule when transactions involve VASPs subject to jurisdictions that do not yet require full implementation of FATF's travel rule. The grace period ends on 1 April 2022, for transactions with VASPs in EU/EEA or equivalent third countries and on 31 December 2021, for transactions with VASPs in any other jurisdiction.
The minimum threshold for the Crypto Travel Rule in Liechtenstein is 1 franc (CHF) (Art. 23b, SPV).
For compliance with the crypto travel rule in Liechtenstein (Art. 23b /1, SPV), the following information needs to be shared between VASPs:
In Liechtenstein the PII that needs to be exchanged in the context of the travel rule is the same for cross-border and internal transfers.
In principle, in Liechtenstein, the travel rule does not apply to VASPs' interactions with non-custodial or self-hosted wallets. However, in such cases, VASPs are required to apply enhanced due diligence measures.
The travel rule only applies to VASPs in Liechtenstein when their counterparty is also a VASP (FMA's Instruction, Chapter 2). The TVTG lists the activities that trigger qualification as a TT Service Provider (Art.2 /1/k, TVTG). Non-custodial or self-hosted wallet services are not included in said list. However, it should be assessed whether the non-custodial service provider carries out any other activity that might be covered.
Notabene has a live end-to-end Travel Rule compliance solution that allows VASPs to comply with their local regulators' requirements. Our solution is tailored to the compliance needs of our clients across jurisdictions and includes methods to perform proof of ownership verification when interacting with non-custodial wallets and a directory with verified information that helps our clients smoothly identify their counterparty VASPs.
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