Introduction to VASP Licensing in Nauru

With the rise of digital finance and virtual assets, jurisdictions like Nauru are aligning with global regulatory standards to ensure financial transparency and combat illicit activities. In response to FATF Recommendation 15, Nauru has introduced a comprehensive framework to regulate Virtual Asset Service Providers (VASPs) under the Anti-Money Laundering and Targeted Financial Sanctions Act 2023 (AML-TFS Act).

Zitadelle AG supports fintech and crypto companies by offering expert consultancy for VASP license applications in Nauru, ensuring compliance with all legal and operational requirements.

What is a VASP under Nauruan Law?

According to the AML-TFS Act 2023, a VASP is any legal or natural person engaged in:

• Exchange between virtual assets and fiat currencies

• Exchange between one or more types of virtual assets

• Transfer of virtual assets

• Custody or administration of virtual assets

• Financial services related to virtual asset issuers and offerings

Key Requirements for a Nauru VASP License

To legally operate as a VASP in Nauru, the following foundational steps must be completed:

1. Legal Incorporation

VASPs must be established under one of the following legal frameworks:

• Corporations Act 1972 (for companies)

• Partnership Act 2017 (for partnerships)

• Trusts Act 2018 (for trusts)

2. Business Name Registration

All VASPs must register a business name under the Business Names Registration Act 2018 (BNRA 2018).

3. Business License Application

Pursuant to the Business Licence Act 2017 (BLA 2017), no business—including VASPs—may commence operations without a valid license.

4. Beneficial Ownership Registration

VASPs must disclose their beneficial owners under the Beneficial Ownership Act 2017. Compliance includes appointing a nominated officer and following the procedures outlined in relevant regulations.

5. AML/CFT Compliance

VASPs are classified as financial institutions under the AML-TFS Act 2023 and are required to:

• Conduct customer due diligence (CDD)

• Report suspicious transactions to the Financial Intelligence Unit (FIU)

• Maintain comprehensive transaction records for at least 7 years

• Implement internal policies to detect red flag indicators for money laundering and terrorist financing

Regulatory Supervision

In Nauru, the following bodies act as supervisors:

• Registrars of Corporations, Partnerships, Trusts, Business Names, and Business Licenses

• Financial Intelligence Unit (FIU) for AML/CFT oversight

Supervision is both sole and joint, depending on the nature of the compliance obligation.

Red Flag Indicators & Risk Mitigation

VASPs must monitor and address potential AML/CFT risks using FATF’s red flag indicators, which include:

• Unusual transaction sizes or patterns

• Use of privacy coins or mixers

• Incomplete customer identification

• Activity from high-risk jurisdictions

These indicators should inform the company’s risk-based approach and reporting obligations.

Record Keeping and International Cooperation

Under Nauruan law, VASPs must retain all business and customer-related records for 7 years, even after cessation of operations. The legal framework also supports international cooperation through:

• Mutual Assistance in Criminal Matters Act 2004

• Proceeds of Crime Act 2004 (POCA)

Why Choose Zitadelle AG for Your Nauru VASP License?

As a leading compliance and regulatory consultancy, Zitadelle AG offers tailored support throughout the VASP licensing process in Nauru:

• Legal structuring and incorporation

• License and name registration

• AML/CFT policy development

• Ongoing compliance monitoring and reporting

• Communication with Nauruan regulators