On-shore VASP in Luxembourg

Custodian wallet providers registered with the CSSF as VASPs under AML law Art 7-1 kept that registration only until 1 July 2026, or until the CSSF granted or refused MiCA authorisation if earlier (AML law Art 24-1); Art 7-1 was repealed by the Loi du 6 février 2025, so crypto custody now requires a MiCA authorisation or notification.

Luxembourg's VASP registration was governed by Art 7-1 of the Law of 12 November 2004, inserted by the Loi du 25 mars 2020 (Mémorial A n° 193), while a companion Loi du 25 mars 2020 (Mémorial A n° 194) transposed AMLD5 (Directive 2018/843); Art 7-1 was repealed by Art 17 of the Loi du 6 février 2025.

Crypto-asset service providers are obliged professionals under Art 2(1) point 20 of the Luxembourg AML law and must meet its professional obligations (risk assessment, customer due diligence, internal organisation, cooperation and suspicious-transaction reporting, Arts 2-2 to 5), supervised by the CSSF (Art 2-1).

CSSF Circular 22/811 (and previous versions like 20/747 and 21/769 which it consolidates/replaces): This circular provides detailed guidance on AML/CFT obligations for VASPs.

MiCA authorisation has replaced registration in Luxembourg: under AML law Art 24-1 a VASP's CSSF registration ended when the CSSF granted or refused authorisation under MiCA Art 63, and in any event on 1 July 2026; the CSSF is the competent authority under Art 20-27 of the amended Law of 16 July 2019.

Explicit Requirement: MiCA explicitly mandates crypto-asset service providers offering custody services to:

Keep separate the crypto-assets of their clients from their own crypto-assets and ensure that this is achieved by using different blockchain addresses or distributed ledgers.

Keep separate the funds of their clients from their own funds, in accordance with national law.

Prudential Requirements and Professional Indemnity Insurance: MiCA introduces specific prudential requirements for crypto-asset service providers. For custodians, it requires them to:

Hold own funds (capital requirements) or a professional indemnity insurance to cover liability risks from their operations. The amount will depend on the type of service and associated risks.

However, CSSF Circular 22/811 and the general principles of sound risk management dictate that VASPs must implement robust IT security measures and internal controls to protect virtual assets. This implicitly requires firms to adopt industry best practices for secure storage, which often involves a combination of hot, warm, and cold storage solutions, multi-signature wallets, Hardware Security Modules (HSMs), and comprehensive key management policies. The CSSF assesses the adequacy of these measures as part of the VASP registration and ongoing supervision.

Have sound governance arrangements, including clear organisational structure with well-defined, transparent and consistent lines of responsibility.

The Law of 12 November 2004 on the fight against money laundering and terrorist financing (ELI /eli/etat/leg/loi/2004/11/12/n1/jo) is Luxembourg's core AML/CFT statute. A Law of 25 March 2020 (a194) transposing Directive (EU) 2018/843 added virtual asset service providers to it, and a second Law of 25 March 2020 (a193) inserted the CSSF VASP registration (Art 7-1). Since the loi du 6 février 2025, Art 2(1) point 20 covers crypto-asset service providers and Art 7-1 is repealed.

CSSF Circular 20/747 (as amended by Circular 22/815): This circular is crucial for VASPs as it consolidates and specifies the AML/CFT professional obligations under the amended AML Law for all entities subject to CSSF supervision, including VASPs. It provides detailed guidance on risk assessment, customer due diligence, internal organisation, and reporting requirements.

Evidence fact lu.aml.identification-and-verification not found (may have been renamed).

Obtain and verify the customer's name, residential address, date and place of birth, nationality, and a unique identification number (e.g., from a passport or national ID card).

Under Art 3(2)(b) of the Luxembourg AML law of 12 November 2004, customer due diligence includes identifying the beneficial owner and taking reasonable measures to verify their identity. Art 1(7) treats a shareholding of 25% of the shares plus one, or an ownership interest of more than 25%, held by a natural person as an indication of direct ownership; for trusts and fiducies the beneficial owners include the settlor, trustees, beneficiaries and any person exercising ultimate control.

Luxembourg's Register of Beneficial Owners (RBE) was instituted by the Law of 13 January 2019; Art 12 opens the listed beneficial-owner data to any person. Under Art 3(2) of the AML law of 12 November 2004, professionals including crypto-asset service providers must not rely exclusively on central registers such as the RBE to meet their customer due diligence obligations.

Scrutinize transactions undertaken throughout the course of the relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.

Enhanced Due Diligence (EDD): Required for situations posing a higher ML/TF risk, including:

Regulator: Commission de Surveillance du Secteur Financier (CSSF)

The CSSF register of virtual asset service providers lost its legal basis: the loi du 6 février 2025 repealed the VASP registration article (AML law Art 7-1), and VASPs registered on 30 December 2024 stayed on the register only until 1 July 2026 or an earlier MiCA decision (AML law Art 24-1). Authorised crypto-asset service providers appear in the ESMA interim MiCA register, which listed 13 entries with home Member State Luxembourg on 14 October 2026.