Finland are to become the next EU Member State to legislate in the realm of cryptocurrency providers.
According to reports, the Finnish Ministry of Finance on Friday, the President Sauli Niinisto has approved a law to regulate cryptocurrency service providers such as exchanges, wallet providers, and those issuing crypto or digital currencies. Any business or entity falling into these categories will be required to register with the country’s Financial Services Authority (Fin-FSA) and meet a number of regulatory requirements.
A spokesperson from Fin-FSA said:
“The Act on Virtual Currency Providers enters into force on 1 May. In accordance with the act, the Financial Supervisory Authority (Fin-FSA) will act as the registration authority and supervisory authority for virtual currency providers.”
Registration will be mandatory for all virtual currency exchanges as well as anyone providing custodian wallet services. Any Finland-based coin issuers will also be bound by the new rules.
Requirements for registration include satisfying a number of due diligence requirements and having processes in place to protect clients money. They are also required to keep client funds separate from their own funds, as well as satisfying EU and national anti-money laundering and counter-terrorism financing obligations.
“Going forward, only virtual currency providers meeting statutory requirements are able to carry on their activities in Finland. Virtual currency providers which do not comply with statutory requirements will be prohibited from continuing their business activities, enforced by a conditional fine.”
The law will come into force on May 1st, just five days after it was announced but existing crypto service providers operating in the country will have until November 1st to register. A briefing will be held by Fin-FSA and the Bank of Finland to provide detailed information on the new laws, to those operating, or considering operating in the Finnish crypto industry.
The new rules are based on requirements that were stipulated in the May 2018 amendments to the EU Fifth Anti-Money Laundering Directive. Under the bloc-wide rules, all EU Member States are required to include virtual currency providers in the scope of their national AML/CFT laws by no later than January 10th 2020.
The Finnish crypto industry has been growing steadily over the last few years and presents a robust community where a number of exchanges and providers have been thriving. A fully-fledged EU Member State, they present a good option for those looking to set up within the Union.
The introduction of these new regulations at national level present not only a vote of confidence in the sector, but also a commitment from the Finnish government to work with and support crypto businesses in the future.