On October 23, 2024, Notice No. 87, addressed to entrepreneurs operating in the field of virtual currencies (hereinafter "VASP"), was published on the website of the General Inspector of Financial Information (hereinafter "GIIF").
According to its content, from 30 December 2024, VASPs will be obliged to apply the requirements set out in Regulation (EU) 2023/1113 of the European Parliament and of the Council of 31 May 2023 on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 (hereinafter "TFR Regulation)".
TFR Regulation and the virtual currency/crypto-asset market
The TFR introduces provisions to obtain information on originators and beneficiaries associated with transfers of virtual currencies/crypto-assets, in order to prevent, detect, and investigate money laundering and terrorist financing where at least one of the VASPs involved in a transfer of virtual currencies/crypto-assets is established in the Union or, where applicable, has its registered office in the Union. The Regulation also requires internal policies, procedures, and control mechanisms to ensure the implementation of restrictive measures where at least one of the VASPs involved in a transfer of crypto-assets is established in the Union or, where applicable, has its registered office in the Union.
What does GIIF's announcement no. 87 mean for VASP?
From 30 December 2024, VASPs that have been entered into the register of virtual currency activities maintained by the Director of the Tax Administration Chamber in Katowice will be obliged, among others, to:
- to ensure that the transfer of virtual currencies/crypto-assets is accompanied by certain information about the originator (e.g., name and surname of the originator; address of the originator's distributed ledger/account number of the originator's virtual currencies/crypto-assets; address of the originator). The VASP serving the originator must also obtain information about the beneficiary;
- to verify, before making virtual currencies/cryptoassets available to the beneficiary, the accuracy of information about the beneficiary, based on documents, data or information obtained from a reliable and independent source;
- to implement effective risk-based procedures, including risk-sensitive procedures, for deciding whether to execute, reject, return or suspend a transfer of virtual currencies/crypto-assets that lacks full required originator and beneficiary information and for taking appropriate follow-up steps;
- to have internal policies, procedures and control mechanisms to ensure the implementation of EU and national restrictive measures when transferring virtual currencies/crypto-assets.
VASPs that plan to continue their activities in the field of virtual currencies/crypto-assets and entities that will apply for authorisation under the MiCA Regulation (Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets) should be guided by the Guidelines of the European Banking Authority (hereinafter "EBA") in meeting the requirements imposed by the TFR Regulation, including:
- on information requirements for transfers of funds and transfers of certain crypto-assets, issued under Regulation (EU) 2023/1113 (the “Travel Rule Guidelines” EBA/GL/2024/11);
- on money laundering and terrorist financing risk factors (EBA/GL/2021/02), in particular to the extent that they were amended by the EBA Guidelines of 16 January 2024 amending Guidelines EBA/GL/2021/02. (EBA/GL/2024/01).
Controversy related to the GIIF announcement
The announcement published by the GIIF was considered controversial, mainly due to the fact that "obligations arising from the TFR should be implemented by entities entered in the register of virtual currency activities maintained by the Director of the Tax Administration Chamber in Katowice..." The position adopted by the GIIF contributes to the expansion of the scope of application of the TFR regulation.
Under the TFR Regulation, Article 3(15) of the TFR Regulation specifies that a cryptoasset service provider within the meaning of the TFR Regulation is a cryptoasset provider as defined in the MiCA Regulation. This means that the provider is authorized to provide services under the MiCA Regulation.
Because VASPs are merely registered, they are not subject to licensing under MiCA. Furthermore, VASPs that apply for licensing to provide their services are not required to comply with the requirements of the TFR until they obtain licensing.
*Due to the upcoming legal changes and the change of the conceptual framework of "virtual currencies" to "cryptoassets" (resulting in particular from the changes introduced by Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in cryptoassets - commonly known as the MiCA Regulation), both concepts are used in the article.
This alert is for informational purposes only and does not constitute legal advice.
Legal status as of November 20, 2024
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