Your VASP license won’t save you anymore

2024-12-24 11:40:03 Primitive Reading

From cointelegraph by Louis Bellet

Opinion by: Louis Bellet, CEO of Yellow Network

Crypto.com just bought an Australian broker license.

Finally.

For anyone paying attention, this isn’t just another headline about mergers and acquisitions in crypto — it is the validation of something pretty obvious. You can’t protect retail investors with just a virtual asset service provider (VASP) license and some nice-looking compliance policies.

Recent years have shown us exactly why this matters.

FTX’s collapse exposed the fundamental dangers of exchanges that try to be everything to everyone — marketplace, custodian, market maker, token issuer, etc. — while operating with minimal regulatory oversight. Billions in client assets vanished because the industry accepted the fiction that basic broker-dealer regulations somehow don’t apply to crypto.

Let’s not keep crypto on the fringes

Let’s be honest about the current state of crypto trading. Memecoins are marketed like lottery tickets. Influencers shill tokens without disclosing payments. Exchanges hide behind VASP registrations while allowing manipulated markets to operate.

This approach is not the path to mainstream adoption. Rather, it’s a recipe for keeping crypto on the fringes of finance.

Recent: Crypto compliance ‘no longer optional’ under Australia’s new draft guidelines

Traditional finance isn’t perfect. In fact, it’s far from it. But try pulling off a pump-and-dump scheme on the New York Stock Exchange. Launch a fake stock, run a bogus initial public offering with made-up financials, and vanish with everyone’s money.

You can’t. By design, the infrastructure won’t let you.

Perhaps more importantly, when things do go wrong in traditional markets, investors get repaid first.

Try finding that protection at your favorite VASP-licensed exchange.

Your license is not enough

In crypto, we see this level of fraud regularly, enabled by exchanges hiding behind VASP registrations or e-money provider status like it’s some kind of shield.

“We’re just providing technology services!” they claim. This approach might have made sense in crypto’s early days, but it’s inadequate for today’s market size and complexity.

Disclaimer: This specification is preliminary and is subject to change at any time without notice. Amazon Finance assumes no responsibility for any errors contained herein.