Sep 2, 2019

Compliance update - regulations in various countries

Information from previous weeks latest updates from this week Middle East Jordan License needed. - the license is required and has to be applied at the central bank of Jordan - Crypto Business is prohibitied Iraq License needed.

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Information from previous weeks latest updates from this week Middle East Jordan License needed - the license is required and has to be applied at the central bank of Jordan - Crypto Business is prohibitied Iraq License needed - the license is required and has to be applied at the central bank of Iraq UAE A representative office with License is required - the license is required and has to be applied at the Authority (in UAE it is ADGM) Kuwait Not allowed – No regulation and no license allowed Bahrain A representative office with License is required - the license is required and has to be applied at the Authority Saudi Arabia still under discussion – may require a representative office with License - the license is required and has to be applied at the Authority and central bank together Lebanon Only representative office needed – notification letter to be sent to central bank Syria Not allowed - No regulation and no license allowed Asia China Representative office and license needed - the license is required and has to be applied at the Authority and central bank together Singapore Representative office and license needed - the license is required and has to be applied at the Authority and central bank together Thailand Representative office needed – the representative office should send notification of operation to the authority, but we didn’t have a clear identification of the authority Malaysia There are new guidelines now that may allow the trade of Digital Assets provided this is in line with the Islamic Shariaa India Unclear and no convincing answers to our questions received until now – neither from Central Bank nor from Ministry of Finance Vietnam Representative office - the representative office should send notification of operation to the authority South Korea Not allowed – They require an independent License for operation with an independent setup North Korea No regulation, no decision - we didn’t receive any clear answer to our questions Japan They have no regulation for the cyrpto but they recommend to liaise with financial authorities since they read on a case by case basis Schengen Countries Estonia Representative office and license needed France There is no definite answer. Nevertheless, Financial regulation in France is based upon European regulation with national specifics added on top of it. Finland Still no response or feedback Germany General Regulation based on European Union allows the Trade under specific domestic conditions Greece No clear or specific answer but they follow the European Union regulations Iceland No response Italy No clear or specific answer but they follow the European Union regulations Latvia We have pro-actively transposed AMLD5 requirements related to crypto currency exchanges into national legislation in Latvia. The respective regime will stay into force already as of 1 July 2019. AMLD5 foresees, that currency exchanges servicing EU consumers shall apply for EU license. Liechtenstein No response Lithuania No response Luxembourg No response Malta The entity would still require a license from the MFSA to operate in Malta Netherlands No response Norway No response Poland The Office of the Polish Financial Supervision Authority (Polish FSA), when recognising the legal uncertainty arising from the operation of exchanges and cryptocurrencies exchange offices published the following information on June 6, 2018. According to Art. 8 of the Law of Entrepreneurship, a company may take any action, except from those which are prohibited by law. A company may be obliged to conduct a specific behaviour only on the basis of legal provisions. In the Polish system of law there are no provisions prohibiting the pursuit of business as currency exchange offices, which means that the operation on the territory of the Republic of Poland in the form of a currency exchange and cryptocurrencies trading is not banned and therefore is legal. It should be noted, however, that entities operating in the field of cryptocurrencies and exchange offices are institutions required within the meaning of the Act on AntiMoney Laundering and Combating the Financing of Terrorism (AML/CFT Act) and will therefore have to carry out all the obligations there. In addition, the pursuit of that activity, in the opinion of the Polish FSA, may entail the performance of activities covered by the relevant provisions governing the activities of entities in the financial market and, consequently, the obligation to obtain the Polish FSA permits, e.g. authorisation to perform payment services in the field of payment accounts (the so-called “virtual purse”) and the execution of payment transactions as defined in the Payment Services Act. Consequently, such activities, as any other economic activity, must be in full compliance with the legal provisions in force. It should be noted that the “passporting” of licenses, including licenses to provide payment services, obtained by entrepreneurs outside Poland is in general possible only with respect to licenses obtained in other EU countries. In view of the cases in which exchanges and exchange offices have been operating on the territory of the Republic of Poland or offering clients through the internet such services without having the necessary permits, the Polish FSA is obliged to take appropriate supervisory action. This means that if an entity is identified in a way that is reasonably suspected of breaking the law, the Polish FSA will take action to include it in the "List of public Financial Supervision Authority warnings". In order to meet the expectations of those who declare their willingness to act in accordance with Polish law and to ensure that the funds entrusted to them by their clients (including those operating in the cryptocurrencies market) are adequately secured, and need assistance in identifying the relevant provisions and legal obligations necessary for the pursuit of this activity, the Polish FSA has established the Innovation Hub Programme, whereby it is possible to obtain detailed information on the legal and organisational framework of such activities in a way that ensures the legality of the activities of those entities and the safety of the funds entrusted to them by customers. Portugal A financial institution that is authorised in another European Economic Area (EEA) State may conduct financial activities in Portugal if it has the right to passport under a European Union (EU) Single Market Directive, as long as these activities are included in its home state authorisations. In order to do so, the institution must first contact its home-state regulator which will notify Banco de Portugal. Third country entities, that are not authorised in another EEA State, that wish to provide financial services in Portugal, have to comply with the requirement to be validly authorised by Banco de Portugal in accordance with Portuguese legislation and regulations. So entities that wish to operate in Portugal will have to establish a subsidiary within the EU and apply for a local license or must submit their applications for authorisation to Banco de Portugal. Applicable rules on this matter are conditional on the type of entity and the legal form under which these entities intend to operate in Portugal. Slovakia Subject licensed by any other National Competent Authority from the third countries (i. e. outside of the European Union and the European Economic Area) can operate in Slovakia only under the permission for this activity issued from the National Competent Authority of the member state. The type of the permission derives from the type of activity of the subject. Crypto assets are currently not regulated by the National Bank of Slovakia. We must however inform you, that other laws or regulations might be applicable , such as laws regarding the tax regime for example. As you might already know, all business activities are regulated in Slovakia by the Commercial Code. In addition, if a company wants to operate its business in this field, it must take into account all the risks falling from these activities (for investors, for consumers and also reputational risk). Also, in the past, the National Bank of Slovakia issued a warning towards businesses and consumers concerning crypto assets Slovenia No response Spain No response Sweeden No response Switzerland No clear answer to our enquiry yet Hungary Based on European license they may give a specific permission of activity Georgia Based on European license they may give a specific permission of activity Czech Republic No answer yet Russia Currently, the Bank of Russia, together with interested government authorities , is working on an approach to regulate cryptocurrency exchange Africa The only clear answer is from Juhanesburg where they are in the process of regulating the crypto currency exchange Latin America Still unregulated in these countries Australia No response yet Austria The exchange of “Crypto Currencies” into Fiat Currencies does not require a license in Austria in regards to E-Money Act 2010, Austrian Banking Act or Payment Services Act 2018. Having acquired a license in a third country outside the EEA (European Economic Area) does not have any effects in the Austrian legal assessment. This mean that the Exchange can start there immediately.

Post date 18 May 2019

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