FIN-FSA Grants Five Registrations as Virtual Currency Provider
FIN-FSA granted LocalBitcoins Oy, NorthCrypto Oy, Prasos Oy, Prasos Cash Management Oy, and Tesseract Group Oy registration as virtual currency providers. From November 01, 2019, only virtual currency providers who fulfill the requirements provided by legislation may practice activities in Finland. FIN-FSA stipulates that only registered virtual currency providers provide such services in Finland. If a virtual currency provider does not comply with the requirements, its activities will be prohibited and the FIN-FSA will impose a fine on the provider. Registration and supervision bring virtual currency providers under the scope of anti-money laundering regulation.
The directive on the prevention of money laundering and terrorist financing is now extended to cover virtual currency providers throughout EU. Even though the requirement for the registration and supervision of virtual currencies is based on EU regulations, registration granted by a national competent authority of a member state does not give the service provider authorization to provide services in other EU member states. The registration process requires significant effort from the applicants, for example, concerning customer due diligence and written documentation of activities. Virtual currencies are high-risk investments, despite the registration obligation. The risks include extreme and abrupt price volatility, information security threats on exchange platforms and wallet providers and the fact that many virtual currencies are used as speculative investments.
Virtual currency providers are not subject to statutory risk management and capital adequacy requirements. The regulation and supervision of virtual currency providers is not as comprehensive as that of other financial sector entities. The provision of virtual currencies is an international and cross-border activity. Finnish investors in virtual currencies may, therefore, use services provided by a virtual currency provider operating from another country.
Related Link: Press Release
Keywords: Europe, EU, Finland, Banking, Securities, Virtual Currencies, AML, Registered Virtual Currency Providers, FIN-FSA
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