What’s the difference between a VASP and a self-hosted wallet?

A Virtual Asset Service Provider (also known as a VASP) is a regulated platform that holds your crypto on your behalf. Examples include etoro, Coinbase, and Robinhood Crypto. This custodial model combines strong security with ease of use.

A self-hosted wallet (also known as an external wallet) gives you full control over your crypto, but requires you to manage security and transaction validation independently.

When sending or receiving crypto with etoro, it is important to understand how the Travel Rule applies to each type of wallet under US regulatory requirements.

Transfers between VASPs

• Receiving crypto: If all required information is provided, the crypto may be credited once the necessary checks are completed. If information is missing, you may be asked to confirm the source of the crypto, and access to these cryptoassets may be temporarily restricted during verification. Note that attempts to receive crypto from an unsupported VASP may lead to loss of access to the transferred crypto.
• Sending crypto: You must provide the recipient’s name and confirm the transaction using two-factor authentication (2FA).

The minimum amount for transfers between VASPs is $1. There is no maximum limit, although other limits may apply depending on your account status or the asset.

Self-hosted wallet transactions

Currently, etoro clients in the United States can send and receive crypto to and from self-hosted wallets that they own, after verifying wallet ownership. Note that attempts to receive crypto from a third-party’s self-hosted wallet may lead to loss of access to the transferred cryptoassets. Requirements may change over time in line with applicable regulations and internal compliance controls.

VASPs vs self-hosted wallet: Key differences at a glance

Control: Virtual Asset Service Providers (VASPs) are regulated platforms that manage your crypto on your behalf. With a self-hosted wallet, you have full control and responsibility.

Regulation: VASPs are subject to financial regulations and licensing in the US, while self-hosted wallets are not regulated.

Examples: VASPs include platforms such as etoro, Coinbase, and Robinhood Crypto. Self-hosted wallets include Ledger, MetaMask, Trezor, and Trust Wallet.

Proof of ownership: Not required for transfers between VASPs, but required when sending to or receiving from a self-hosted wallet.

Travel Rule compliance: Handled automatically for transfers between VASPs. Self-hosted wallets require additional verification steps.

Transfer experience: Transfers via VASPs are generally simpler, while self-hosted wallet transfers may involve additional steps.

Best for: VASPs that hold your crypto on your behalf suit users seeking ease and convenience. Self-hosted wallets are ideal for those who want full control and are comfortable managing private keys.

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| Note: Crypto trading is not available in NV, HI, Puerto Rico and the US Virgin Islands. |