Crypto Frontline

EU countries are beginning to make changes in terms of cryptocurrency regulation, as a result of the amendments to the EU Anti-Money Laundering Directive voted on May 30^th, 2018. Finland will become among the first countries to take action with The Act on virtual currency providers, due to enter into force on May 1^st, 2019.

Recently, we’ve seen Japan strengthening oversight on cryptocurrency exchange platforms, and now Finland will set things up a notch and enforce the FIN-FSA (Financial Supervisory Authority) with the task to take care of the registration process for:

• Virtual currency exchange providers;
• Custodian wallet providers;
• Issuers of virtual currencies;

According to the latest press release from FIN-FSA’s website, the registration procedure is necessary in order to make sure that providers will comply with several requirements, including holding and protecting client money, compliance with AML/CFT regulation, segregating client money and own funds, and others.

Meeting planned for May 15^th

The financial agency had already set up a meeting due to take place on May 15^th, intended for virtual currency providers already operating in the market, or planning to do so. The event taking place in Helsinki will cover valuable information about the registration process, steps and schedule, as well as guidelines needed by companies from the industry.

As you may see in the press release, the financial watchdog emphasizes again the risk associated with cryptocurrencies, as they’ve gained attention as “investment objects”:

The risks include sudden major fluctuations in value, data security threats pertaining to exchange services and custodian wallet providers, and the nature of several virtual currencies as speculative investments not involving any inherent source of return. The FIN-FSA encourages investors to carefully assess the risks related to virtual currencies before making an investment decision.

Money laundering seems to be one of the main reasons why Finland wants to introduce a registration process for cryptocurrency issuers and exchange platforms. There is this concern at a global scale that cryptocurrencies, especially those with privacy features, enable people to bypass the fiscal system and thus avoid paying taxes.

Finland is already a country where technology stands at the core of future economic developments and the decision to regulate cryptocurrencies proves that it does not want to ban them, but instead, favor the use of any blockchain-based application that could contribute to an increase in productivity in the long run. As we’ve stated in the past, a coordinated move at a global scale is required, so regulation for cryptocurrencies will not favor the appearance of crypto safe havens.