CMS Expert Guide to Crypto Regulation in Liechtenstein
- How is crypto regulated?
- What are the steps taken by the regulator to adopt MiCAR?
- Are the following activities regulated or unregulated in your jurisdiction? ― Direct sales of tokens by issuers Exchange (buy/sell) ― Custody (hold) ― Borrowing/lending ― Yield/staking services —Staking on proof of stake consensus mechanisms (please indicate if NFTs are treated differently from fungible crypto-assets for each activity)
- Can offshore business provide services to local customers on either active solicitation or reverse solicitation basis?
- How long would establishing a crypto-asset business/obtaining a license in your jurisdiction take?
- What would be the approximate overall cost of obtaining a licence?
- What is the probability (%) of success in obtaining a licence?
- What other limitations are there in your jurisdiction when looking to set up a crypto-asset business? E.g., Compliance requirements and physical presence
jurisdiction
Disclaimer: This chapter was last updated 21 November 2024 and does not reflect any subsequent developments. The information provided is intended for general informational purposes and should not be construed as legal advice.
1. How is crypto regulated?
| AML Regulation | Any other regulation |
Law of 11 December 2008 on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Act, DDA; Sorgfaltspflichtgesetz; SPG) Ordinance of 17 February 2009 on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Financing of Terrorism (Due Diligence Ordinance, DDO; Sorgfaltspflichtverordnung, SPV) | Law of 3 October 2019 on Tokens and TT Service Providers (Token and TT Service Provider Act, TVTG; Token- und VT-Dienstleister-Gesetz TVTG) and from Law of 10 December 2008 on the Enforcement of International Sanctions (International Sanctions Act, ISA; Gesetz über die Durchsetzung internationaler Sanktionen, ISG) In the future also: MiCAR (EU) 2023/1114 and Regulation (EU) 2023/1113 (both are not yet reflected in this overview) |
2. What are the steps taken by the regulator to adopt MiCAR?
In preparation for the implementation of MiCAR into national law, the FMA has been holding initial informal discussions since June 2024 with interested parties seeking authorisation as crypto-asset service providers pursuant to Article 62 MiCAR. In addition, the FMA has been accepting initial preliminary applications since the beginning of October and emphasises that these should be submitted as complete and with as high a quality as possible.
The activities listed under point 3 are considered crypto-asset services pursuant to Article 3(1)(16) MiCAR and will be subject to authorisation in accordance with Article 62 MiCAR in the future. However, it should be noted that non-fungible tokens (NFTs) do not fall within the scope of MiCAR pursuant to Article 2(3) MiCAR. As MiCAR and the TVTG will apply in parallel in the future and their respective scopes are mutually exclusive, it is possible that NFTs may fall under the TVTG.
The answers to the questions below refer to the currently applicable national rules. It is important for TT service providers to know that they may continue to operate under the TVTG until the expected end of the transitional period on 31 December 2025. However, cross-border activities in the EEA will only be permitted once MiCAR has been implemented in the EEA Agreement and a licence has been obtained in accordance with Article 62 MiCAR.
3. Are the following activities regulated or unregulated in your jurisdiction? ― Direct sales of tokens by issuers Exchange (buy/sell) ― Custody (hold) ― Borrowing/lending ― Yield/staking services —Staking on proof of stake consensus mechanisms (please indicate if NFTs are treated differently from fungible crypto-assets for each activity)
| AML Regulation | Any other regulation |
Generally, VT service providers and agents that are subject to registration under the TVTG are subject to AML requirements under the Liechtenstein Due Diligence Act (Sorgfaltspflichtgesetz, DDA). In implementation of the FATF standards, all service providers related to tokens or virtual currencies who offer services to third parties are therefore subject to anti-money laundering supervision (Article 3 SPG). Services that require registration include, but are not limited to, the following:
For the other mentioned activities, it depends on the specific field of activity and details of that activity to provide an appropriate answer. As a rule of thumb, whenever licensing or requirements are triggered (also under traditional financial regulation), AML requirements will apply. It is crucial to assess on a case-by-case basis what kind of cryptocurrency is part of the business model and what licensing requirements may be triggered due to, for example, the processing of payments or other relevant processes that are part of the services provided. Note that the above is provided based on the assumption that the token/crypto asset in question is not a financial instrument. Whenever the respective token/crypto asset qualifies as a financial instrument or e-money, further licensing requirements apply. | Subject to the registration requirement under the Law of 3 October 2019 on Tokens and TT Service Providers (Token and TT Service Provider Act; TVTG), the following activities are regulated: Direct sales of tokens by issuer A “token issuer” under Art 2 (1) (k) TVTG is a person who publicly offers tokens in their own name (or on behalf of a principal) and also falls under the umbrella term of a “TT service provider”. Art 2 (1) (g) TVTG defines the token issue as the offering to the public in any form and by any means of communication with the aim of selling tokens to users. The technical generation must be distinguished from the issuance of tokens, as the mere generation of tokens does not constitute an offer. The term “public” will generally be fulfilled if a communication with the aim of selling tokens to users is addressed to an addressee group that is in principle intended to be unrestricted. Exchange According to Art 2 (1) (2) TVTG, a “TT Trading Platform Operator” is a person who operates a trading platform for crypto-assets (not including NFTs) that brings together or facilitates the bringing together of buying and selling interests of multiple third parties on the platform and in accordance with its rules in such a way that a contract for the exchange of crypto-assets is concluded either for other crypto-assets or for a nominal currency that is legal tender. In contrast, according to Art 2 (1) (q) TVTG, a “TT Exchange Service Provider” is a person who exchanges legal tender for crypto assets (other than NFTs) and vice versa, as well as crypto assets (other than NFTs) for crypto assets (other than NFTs) against their own ledger; Custody “TT Depositary” means a person who safeguards TT Keys or Tokens for clients (Art 2 (1) (n) TVTG). Borrowing/ lending and yield/ staking The “Token Lending Company” is a person who receives tokens under the condition that they can dispose of them at their own discretion or on the instructions of clients, but must retransfer tokens after a certain period of time (Art 2 (1) (v) TVTG) and therefore shall catch service providers that offer services that are usually considered staking or lending. Under the present regulations, the legality of an action depends on the specific field of activity and details of that activity. In Art 2 (1) z TVTG, the definition of “crypto asset” has been explicitly reduced to “fungible tokens”, non-fungible tokens are not included. Some services (as outlined above) are therefore only subject to a registration requirement, if provided in relation to crypto assets other than NFTs. Note that the above is provided based on the assumption that the token/crypto asset in question is not a financial instrument. Whenever the respective token/crypto asset qualifies as a financial instrument or e-money, further licensing requirements apply. It is crucial to assess on a case-by-case basis what kind of cryptocurrency is part of the business model and what licensing requirements may be triggered due to, for example, the processing of payments or other relevant processes that are part of the services provided. |
4. Can offshore business provide services to local customers on either active solicitation or reverse solicitation basis?
In contrast to the conventional standard, which in principle provides for authorization requirements for cross-border service provision for financial institutions, the TVTG is only based on applicability if a) tokens are placed on the market or issued by a TT Service Provider domiciled or resident in Liechtenstein, b) parties expressly declare its provisions to be applicable in a legal transaction concerning tokens, or c) tokens are used in legal transactions by a natural or legal person domiciled or resident in Liechtenstein.
Therefore, offshore businesses are able to provide services to local customers [on an active solicitation basis, as well as a reverse solicitation basis]. Offshore businesses are not required to register or become licensed, subject to one exception: There is an obligation to register in the TT Service Provider Register in accordance with Art. 12 TVTG only for individuals and firms domiciled in Liechtenstein who intend to provide TT services under the TVTG in Liechtenstein on a professional basis before providing the service for the first time. The only exception is provided by Art. 12 para. 3 TVTG for individuals and firms domiciled or resident abroad who wish to provide TT services in Liechtenstein by means of physical machines. These must also apply for a registration in the TT Service Provider Register. For the sake of completeness, the role of the "TT Agent" in Art. 2 para. 1 lit. u) TVTG should be mentioned, which is a person who professionally distributes or provides TT services in the name and for the account of a foreign TT service provider in Liechtenstein, but who is also domiciled in Liechtenstein and is not an offshore company. The above only reflects the position under the TVTG. Note that whenever the respective token/crypto asset qualifies as a financial instrument or e-money, further licensing requirements apply.
5. How long would establishing a crypto-asset business/obtaining a license in your jurisdiction take?
| AML Regulation | Any other regulation |
For the above-mentioned services, the AML requirement is generally linked to the registration under the TVTG. Therefore, for the following questions, the provisions of the TVTG must also be considered. As can be seen from the example of operators of trading platforms for non-fungible tokens (NFTs), the duty of due diligence can, under certain circumstances, go beyond the requirements of the TVTG. |
The Financial Market Authority Liechtenstein (FMA) must decide on the application for registration under the TVTG within three months. (Art 19 TVTG). The FMA emphasizes that the duration of the respective registration process depends significantly on the quality of the submitted documents. In addition, it must be taken into account that the TT Service applied for may only be exercised for the first time after having entered into the TT Service Provider Register (Art 19 (5) TVTG). Note that, whenever the respective crypto qualifies as financial instrument or e-money, further licensing requirements apply. In such case, the timeframes are significantly longer. |
6. What would be the approximate overall cost of obtaining a licence?
| AML Regulation | Any other regulation |
| Please refer to the answer above. | The fees are based on Annex 1 of the Act of June 18, 2004 on Financial Market Supervision (Financial Market Supervision Act; FMAG). Accordingly, the fee for registering or refusing to register as a TT Service Provider, irrespective of the number of TT Services, is generally CHF 3,500; if a fee of CHF 2,000 has already been charged for the provision of information in accordance with Art. 43 para. 2 let. b TVTG, the fee is CHF 1,500. In the case of TT Agents, the fee is CHF 700; Subsequent registration of additional TT services costs a further CHF 700, and a review of a change to the registration requirements also costs CHF 700. Additional fees may be charged for issuing confirmation of a register entry (CHF 50), withdrawal and cancellation (CHF 250) and other procedures. Note that this does not include legal advice or incorporation costs. In addition, it has to be considered that, whenever the respective crypto qualifies as financial instrument or e-money, further licensing requirements apply. In such case, the costs are significantly higher. |
7. What is the probability (%) of success in obtaining a licence?
| AML Regulation | Any other regulation |
| Please refer to the answer above. | If the conditions are met, there is a high probability for obtaining a registration. The FMA may only refuse the registration if the registration requirements are not met. In this event, it is possible to file a complaint within 14 days. |
8. What other limitations are there in your jurisdiction when looking to set up a crypto-asset business? E.g., Compliance requirements and physical presence
| AML Regulation | Any other regulation |
| Please refer to the answer above. | In general, Art. 13 TVTG specifies the legal requirements for an entry in the TT Service Provider Register. Some requirements are the following, however this is not an exhaustive list: The TVTG is applicable to natural and legal persons with headquarters or place of residence in Liechtenstein who wish to professionally act as TT Service Providers. Depending on the activity of the TT service provider, different levels of requirements apply; for example, applicants who intend to operate as TT Service Providers in accordance with Art. 2 para. 1 let. k, n, p, q and v to y TVTG must have an appropriate minimum capital at the start of their activity. The respective requirements for obtaining a registration must always be met (e.g. organisational requirements, internal control system, substance, adequate resources and minimum capital, reliability and a technical suitability). |
The experts from Gasser Partner provided the input.
