Finland approves Virtual Currency Providers Act, effective May 1

The President of Finland has approved a new law to regulate cryptocurrency service providers, which will cover cryptocurrency exchanges, custodial wallet service providers, and cryptocurrency issuers. The new law will take effect next week, and cryptocurrency service providers must register with the Finnish Financial Supervisory Authority and meet statutory requirements before they can conduct business.

Finland approves cryptocurrency bill

On Friday (April 27th) local time, the Finnish Ministry of Finance announced that the country’s president has approved the Act on Virtual Currency Providers, which will come into effect on May 1, 2019. The Finnish Financial Supervisory Authority will serve as the registration agency and regulator for virtual currency providers.

According to the Finnish Financial Supervisory Authority, three types of institutions must register with the authority to conduct virtual currency business, namely:

1. Virtual currency exchange service providers;

2. Custody wallet service provider;

3. Virtual Currency Issuer

All of these institutions must comply with the requirements of the Virtual Currency Providers Act and must be reliable and able to hold and protect customer funds, while also keeping customer funds separate from their own funds in accordance with anti-money laundering and CFT regulations.

The Finnish Financial Supervisory Authority elaborated on the regulation:

“Going forward, only virtual currency service providers that comply with the legal requirements will be able to continue to operate in Finland. Virtual currency providers that do not comply with the legal requirements will be prohibited from continuing their business activities and will be subject to a conditional fine.”

Although the Virtual Currency Providers Act came into effect on May 1, Finnish regulators have given the country's existing crypto service providers a buffer period, allowing them to complete registration with the Financial Supervisory Authority before November 1. In addition, the Finnish Financial Supervisory Authority will explain the new regulatory requirements to crypto service providers and other companies planning to conduct crypto business at the central bank meeting on May 15.

Compliance with EU legislation

The Finnish Financial Supervisory Authority pointed out that the reason for introducing new cryptocurrency regulatory laws is to respond to the EU Anti-Money Laundering Directive (Fifth Anti-Money Laundering Directive Amendment) issued in May last year, which requires all EU member states to extend the scope of anti-money laundering and anti-terrorist financing legislation to virtual currency-related services before January 10, 2020.

Furthermore, if a crypto service provider legally operates in another country, they must also register in Finland, as the Finnish Financial Supervisory Authority believes that each member state has its own laws that must be followed.

Article translated from Bitcoin.com