The Italian Ministry of Economy and Finance (“MEF”) issued a new decree (“Decree”) requiring virtual currency/asset service providers to immediately enroll in a special section of the registry to be established soon of the Agency Agenti e Mediatori. (“OAM”), with the aim of monitoring cryptocurrency exchanges and implementing anti-money laundering controls.
For quite some time now, both national and international authorities have kept an increasingly close watch on cryptocurrency markets, albeit with limited powers of intervention. On April 28, 2021, the Bank of Italy and the Italian Securities and Exchange Commission (“Consob”) issued a joint statement urging the public and small savers to beware of the risks inherent in “crypto activities.” “. Consob also issued tailored sanctions when it found that certain services qualified as Markets in Financial Instruments Directive (“MiFID”) services were provided without the required authorizations and licenses through the use of its general surveillance powers.
The Decree establishes clearer requirements for the provision of any virtual currency/digital asset service in Italy by introducing administrative sanctions in case of non-compliance with the applicable regulations.
Pursuant to the Decree, the special section will come into operation on May 18, 2022 with a grandfathering period of 60 days for operators already active in Italy. As of that date, any provider of cryptocurrency exchange, cryptocurrency trading, digital wallet and, in general, any service related to virtual currency (“Providers”) must register in the special section to conduct business in Italy and, as As a result, implement ad hoc policies and procedures to ensure compliance with the new Italian legal framework. Failure to register will result in administrative sanctions and the exercise of such services will be illegal.
The Decree also establishes: (i) periodic disclosure obligations of (a) Suppliers to the OAM (with respect to clients and transactions carried out in Italy) and (b) the OAM to MEF; and (ii) cooperation commitments between the OAM and the other authorities, for example, AML, Bank of Italy and Consob.
Several jurisdictions have implemented the Financial Action Task Force (“FATF”) recommendations on virtual asset service providers, including the United Kingdom, Spain, France, Ireland, and the Netherlands, to name a few. The impact of these new proposals in Italy is likely to follow the pattern seen elsewhere, with several current providers leaving the market but others taking advantage of the opportunities created by this new regime.