Assessing the Solvency of Virtual Asset Service Providers: Are Current Standards Sufficient?
arxiv(2023)
摘要
Entities like centralized cryptocurrency exchanges fall under the business
category of virtual asset service providers (VASPs). As any other enterprise,
they can become insolvent. VASPs enable the exchange, custody, and transfer of
cryptoassets organized in wallets across distributed ledger technologies
(DLTs). Despite the public availability of DLT transactions, the cryptoasset
holdings of VASPs are not yet subject to systematic auditing procedures. In
this paper, we propose an approach to assess the solvency of a VASP by
cross-referencing data from three distinct sources: cryptoasset wallets,
balance sheets from the commercial register, and data from supervisory
entities. We investigate 24 VASPs registered with the Financial Market
Authority in Austria and provide regulatory data insights such as who are the
customers and where do they come from. Their yearly incoming and outgoing
transaction volume amount to 2 billion EUR for around 1.8 million users. We
describe what financial services they provide and find that they are most
similar to traditional intermediaries such as brokers, money exchanges, and
funds, rather than banks. Next, we empirically measure DLT transaction flows of
four VASPs and compare their cryptoasset holdings to balance sheet entries.
Data are consistent for two VASPs only. This enables us to identify gaps in the
data collection and propose strategies to address them. We remark that any
entity in charge of auditing requires proof that a VASP actually controls the
funds associated with its on-chain wallets. It is also important to report fiat
and cryptoasset and liability positions broken down by asset types at a
reasonable frequency.
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