Finland’s Financial Supervisory Authority (FIN-FSA) has published an announcement which confirms that it would now be overseeing the registration and operations of the country’s crypto sector. In its announcement, the financial regulator clarified that going forward, it would be in charge of registering all cryptocurrency wallet providers, exchange platforms, and issuers that want to operate within its borders.
AML laws will take full effect
The watchdog also pointed out the Act on Virtual Currency Service Providers, new legislation that will take effect in the country as from May 1. The new Act was drafted based on the Fifth Anti-Money Laundering (AML) Directive of the European Union. EU’s directive was drafted and implemented in July 2018, establishing a framework and oversight of crypto-based companies within the EU, with the intent of mitigating the use of cryptocurrencies for terrorist financing and money laundering purposes.
In a press release announcing the new AML framework, the EU wrote:
“The 5th Anti-Money laundering directive also increases the cooperation and exchange of information between anti-money laundering (AML) and prudential supervisors, including with the European Central Bank.”
However, FIN-FSA clarifies that successful registration at the national level, even under the new legal framework, doesn’t give a company the right to provide similar services in other EU countries on the basis of registration granted in a member state.
Comply or pack out
Finland’s financial watchdog is not playing around. The agency wants all crypto-based firms to comply with these rules or face the consequences. It has a broad definition of crypto companies, which includes but not limited to those that concern the segregation of assets belonging to service providers and clients, the storage and protection of clients financial assets, and heeding all AML/CFT rules.
To prevent any confusion, the regulator says it would be convening a briefing with all organizations within the crypto industry on May 15.
The briefing will be held at the auditorium of the Bank of Finland in Helsinki, where the regulator is expected to provide information relating to registration deadlines, procedures to follow, as well as timelines for each procedure.
Exchanges are making adjustments
Last month, international peer-to-peer crypto change platform LocalBitcoins announced via a blog post that it would be supervised by the FIN-FSA henceforth. In its announcement, the Helsinki-based crypto exchange revealed that the Finnish Parliament had drafted new legislation that would provide regulatory clarity to cryptocurrencies in the country. The exchange claimed that adopting all of these laws would help boost the public’s perception off cryptocurrencies, while specifically improving Bitcoin’s “standing as a viable and legit financial network.”
In addition to that, the exchange pointed out that it would be developing tools and safeguards to improve its level of compliance with security regulations. The company pointed out that it launched a new account registration process, which would make it easier for new customers to find suable trading partners. It also informed its customers that it would be working on a more robust identity verification process.
An all-inclusive FinTech industry
As stated by LocalBitcoins, regulation by the FIN-FSA will surely improve the public perception of cryptocurrencies and crypto-related organizations. It will also improve the collaboration between crypto-based organizations and traditional financial service providers in the country.
Earlier this year, news platform Bloomberg reported that Parsos Oy, a Finnish crypto wallet and service provider, was on the verge of collapse after various banks reportedly declined to conduct business with it. According to the report, various leading banks in the country, including the OP Group, Saastopankki, S-Bank, and Nordea Bank AB, closed Parsos Oy’s accounts with them, as they were concerned about conducting business with a company in Finland’s then-unregulated crypto market and the prospect of violating any AML law.
Public recognition will help stem instances such as this and provide a proper framework for companies in both sectors going forward.