Finland has issued a new regulation concerning cryptocurrency service providers, such as online exchanges and wallets.
The regulation, called “The Act on virtual currency providers“, establishes that providers of services related to virtual currencies are subject to control by the Finnish Financial Supervisory Authority (FIN-FSA) as of May 1st, 2019.
The FIN-FSA will therefore act as the registration and supervisory authority for these service providers.
IN-FSA will record and monitor exchanges, custody services such as online or third-party wallets, and virtual currency issuers. This registration will be used to ensure that these crypto service providers comply with legal requirements such as supplier reliability, custody and protection of customer funds, separation of own funds from customer funds, compliance with AML regulations.
In the future, only suppliers that meet the legal requirements will be allowed to operate in the country. In fact, suppliers who do not comply with the above legal requirements will be prohibited from continuing to offer their services to the Finnish people.
This regulation only applies to service providers, i.e. intermediaries, whereas none of this applies to the direct and personal use of instruments such as proprietary wallets or decentralised exchanges.
Furthermore, no protection for virtual currency investors will be introduced, as the main purpose is simply to include crypto service providers within the framework of the new European anti-money laundering legislation.
This Finnish law is based on EU anti-money laundering legislation, of which Finland is a member. By January 10th, 2020, all EU countries will have to transpose these directives, and Finland is simply one of the first countries to do so.
A particular aspect is the fact that the famous P2P Localbitcoins exchange is based in Helsinki. Nevertheless, it has already been announced that the exchange is working on improvement measures to comply with the new regulation: one of these will be a new process of registering users to verify their basic information.