Finland to introduce regulation for crypto service providers on May 01

Finland has approved a law to introduce regulation for cryptocurrency service providers, Bitcoin.com reported.

The Act on Virtual Currency Providers will come into effect on May 01, 2019, and covers exchanges, custodian wallet providers, and issuers of cryptocurrencies. Under the new law, the Financial Supervisory Authority (FIN-FSA) will act as the registration authority and supervisory authority for virtual currency providers.

Crypto service providers would be required to register with the FIN-FSA which would ensure their compliance with the statutory requirements concerning the reliability of the provider, holding and protecting client money, segregation of client money and own funds, marketing of services, and compliance with AML/CFT regulation.

“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 FIN-FSA said.

The requirements are based on the May 2018 amendments to the EU Anti-Money Laundering Directive (the Fifth Money Laundering Directive).

“All EU member states must include services related to virtual currencies within the scope of AML/CFT legislation by 10 January 2020,” the FIN-FSA added.

The law also includes a “transitional provision”, under which existing crypto service provides can continue their operations without registration until November 1.

On May 15, the regulator will hold a briefing session at the Bank of Finland to explain the new rules to existing crypto service providers as well as new entrants in this space.