Updated: Nov 7, 2019
After Finland's Financial Supervisory Authority (FIN-FSA) began regulating the cryptocurrency sector back in May this year, it has finally approved five of its service providers this month. The five approved crypto service providers will be operating legally in the country, according to the statement made by the officials.
The authority said it hopes that crypto-based firms will keep on complying with the laws related to reliability, protection of client funds, segregation of the company's money and that of the clients, compliance with Anti-Money Laundering and combating the Financing of Terrorism (AML/CFT) regulations.
The five registrants
As per the announcements made by FIN-FSA, official registration to LocalBitcoins, NorthCrypto, Prasos, Prasos Cash Management, and Tesseract Group has been granted. “Effective November 01, these five virtual currency providers will be the only ones allowed to operate in Finland”, the FIN-FSA officials said.
LocalBitcoins operates as a global person-to-person bitcoin marketplace where people from different countries can exchange their local currency to bitcoins.
NorthCrypto boasts of being specialized in blockchain technology and offering exchange services for Euros to Bitcoin and Litecoin.
Prasos offers cryptocurrency exchange and asset management services under four of its brands namely Coinmotion, Bittiraha, Denarium, and Bittimaatti.
Tesseract Group, formerly known as Whalelend, offers asset management, OTC trading, as well as lending services.
Making their way to approval
“The registration process requires significant efforts from the side of applicants, for instance concerning customer due diligence and conducting written documentation of activities”, an explanation by the FIN-FSA officials said.
The assessment during the registration included a check on whether the applicants took significant steps in the areas of preventing money laundering, terrorist financing, holding and protecting client funds as well as developing an adequate management structure. Applicants were required to submit written statements describing the ways they were complying to the requirements. The applicants were also monitored for compliance through requested clarifications and random inspections.
“From November 01, 2019, only those virtual currency providers who fulfill the requirements provided under the legislation will be allowed to practice in Finland”, a statement given by FIN-FSA officials had mentioned.
As already mentioned, the act on virtual currency providers came into force on May 01, when FIN-FSA was made the Registration and Supervisory Authority for the government of virtual currency providers. And, crypto issuers, exchange facilities, marketplace operators and wallet providers were required to register. However, traders who offer crypto services occasionally or within a limited network were made exempt from the registration process.
According to FIN-FSA, a “wallet provider” is “a natural or legal person who holds the virtual currency for the account of some third party”, or “someone who provides for the transfer and storage of virtual currency.” The regulators reiterated that “no new virtual currency provider will be eligible to start the provision of crypto services in the country before its registration is approved, and if it does not comply with the requirements, all of its business activities will be banned with an additional fine being imposed.”