Ian O'Mara, senior associate: "As noted above, on 23 April 2021, the 2021 Act was commenced transposing the 5MLD into Irish law. One of the most far-reaching changes introduced by the 2021 Act is the new requirement for VASPs to register with the Central Bank. Firms providing virtual asset services are now "designated persons" for the purposes of the 2010 Act and are therefore required to comply with the AML/ CFT obligations contained under Part 4 of the 2010 Act.
On 16 March 2021, the Central Bank published the details of the new process for VASPs to apply for registration with the Central Bank and commenced its supervision of VASPs on 23 April 2021. The Central Bank notes on its website that firms providing virtual asset services will be required to register with the Central Bank for AML/CFT purposes only. Firms not established in Ireland and/or not carrying on business as a VASP immediately prior to the 2021 Act coming into force on 23 April must be registered with the Central Bank prior to the commencement of any services relating to virtual assets from Ireland. There is, however, a transitional arrangement for VASPs operating at the time the registration requirement came into force. VASPs that were in operation on 23 April 2021 are permitted to continue to provide services provided they apply for registration with the Central Bank within 3 months of the registration requirement coming into force (i.e. they must file their registration applications with the Central Bank by 23 July 2021 at the latest).
The Central Bank has also confirmed that firms which are currently authorised by the Central Bank for prudential and/or conduct of business services, that provide or plan to provide virtual asset services, are obliged to register with the Central Bank in relation to these activities.
The 2021 Act also provides that where a person is taken to be registered to carry on business as a VASP, the Central Bank may impose conditions/requirements or both if it considers it necessary in carrying out proper supervision of the VASP. Any condition or requirement imposed may be appealed.
Another item to note is that the Financial Action Task Force ("FATF") is currently consulting with private sector stakeholders on its revised Guidance for a Risk-based Approach to Virtual Assets and VASPs, which was published in March of this year (the "Updated FATF Guidance"). The Updated FATF Guidance is due to be finalised sometime in June 2021, and, in its current form, clearly suggests that the definition for VASPs is expansive and should be read very broadly. We believe the Updated FATF Guidance will (once finalised) quickly become the benchmark regulatory commentary on the scope of VASP regulation both in Ireland and internationally. We will update clients as soon as the Updated FATF Guidance issues."
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