Saturday, October 31, 2020

Finland’s new cryptocurrency regulation forces AML on industry

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Cryptocurrency businesses in Finland will now have to register with the country’s financial watchdog.

As a result of the ACT OF VIRTUAL CURRENCY PROVIDERS, which comes into force on May 1, businesses will have to adhere with statutory requirements, including holding and protecting client money, segregating client money and own funds, and ensuring compliance with anti-money laundering regulation.

The Act is based on the European Union’s anti-money laundering legislation and seeks to bring virtual currency providers within the scope of anti-money laundering regulation, in line with the 5th Anti-Money Laundering Directive (5th AMLD).

“Going forward, only virtual currency providers meeting statutory requirements are able to carry on their activities in Finland,” reads a statement issued by the Finnish Financial Supervisory Authority (FIN-FSA). “Virtual currency providers which do not comply with statutory requirements will be prohibited from continuing their business activities, enforced by a conditional fine.”

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In its statement, FIN-FSA went on to note that despite the incoming supervision and registration, “the characteristics of virtual currencies and the risks related to virtual currency investments remain unchanged.”

On a different note, authorities across the globe have struggled with the notion of regulating cryptocurrencies. In the UK, the Financial Conduct Authority launched a consultation on existing guidance around crypto-assets amid fears that businesses could be putting consumers at risk by offering unauthorized services.

More recently, the Swiss Federal Assembly approved a motion requesting the Federal Council regulate cryptocurrencies.

It’s not hard to see why governments are keen to regulate cryptocurrencies to protect citizens, but also to oversee and control what’s happening in the industry.

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