Counterparty due diligence

Counterparty due diligence is how a bank, payment firm or VASP confirms who it is dealing with when another crypto provider sits on the other side of a transaction. Under MiCA, VASPnet recommends recording four details for each counterparty: the legal entity providing the service, its Article 63 or Article 60 route, the services its permission covers and its home supervisor.

The counterparty profile also needs refreshing, because permissions can be withdrawn and groups can move their business to another entity. For relationships with providers outside the EU, Article 19b of the EU anti-money laundering directive adds specific checks.