Finland has approved a new law to regulate cryptocurrency services after the country’s president signed the bill that was passed by the Finnish parliament in March. This is the first time a law of such nature has been implemented in the country. According to the new law, all exchanges would be required to register with the country’s financial regulation authority and abide by their statutes.
The act gives the Finnish Financial Supervisory Authority (Fin-FSA) not only powers over the exchange registration but also crypto trading. The Finnish Finance Minister announced the signing of the bill into law by the president in a statement released on Friday:
Going forward, only virtual currency providers meeting statutory requirements can carry on their activities in Finland. Virtual currency providers who do not comply with regulatory requirements will be prohibited from continuing their business activities, enforced by a conditional fine.
The law affects exchanges and companies that provide cryptocurrencies. The bill will go into effect on May 1st, 2019. The law also gives a transitional period to the companies already working in Finland. All crypto exchanges operating in Finland before this date can continue operations without registering till November 1st, after which they would become illegal operationally. The Fin-FSA will also hold a session to brief existing companies about the new law on May 15th at the Bank of Finland.
The law has been enforced amid dwindling governmental confidence over the safety of cryptos as they have been used for money laundering around the world. The Finnish government is abiding by the EU’s new amendments to the money laundering act. The changes came into effect on May 30th, 2018, by the European Parliament. The modifications, among other things, include the EU’s plan to stop money laundering through cryptocurrencies. That’s why the member states are now encouraged to create stricter crypto regulations. Although the supervision of the cryptocurrencies is done on the EU level, the exchanges have to register in every country they want to work in. The new law by the EU states:
All EU member states must include services related to virtual currencies within the scope of AML/CFT legislation by 10 January, 2020.
A local BTC trading platform based in Helsinki, announced in March that the company was adding more verification processes to improve the Know Your Customers (KYC) and Anti Money Laundering (AML) requirements. The blog post by the company also suggested that the company would now be supervised by the Fin-FSA. The company’s new policy would help it in combating many fake accounts on their platform. The increased verification would make the KYC and AML guidelines stricter for the company as suggested by the EU. In their blog post, the company stated:
“As requested by many users, we are also currently developing a more efficient and reliable identity verification process. The new ID verification system will introduce four individual account levels per trade and BTC transaction volume, that should increase trustworthiness and add distinction to the user profile”.