Out-Law / Your Daily Need-To-Know

Banco de España publishes rules for entry to crypto currency register

Out-Law Analysis | 25 Oct 2021 | 11:00 am | 1 min. read

Companies that exchange virtual currencies for fiat currency and provide custody services for electronic purses will have to register in the Register under rules published by the Banco de España.

The measures are designed to prevent money laundering. Law 10/2010 of 28 April 2010 on the prevention of money laundering and terrorist financing (LPBCFT) gives the Banco de España power to register people and companies providing these services. This is the case where the basis, direction or management of these activities is located in Spain, irrespective of the location of the recipients of the service, and all people and companies providing the services are established in Spain, irrespective of the location of the recipients.

All of them will be obliged to register regardless of whether they are also registered in other administrative registers with the Banco de España or with other authorities.

By the end of October the register must be fully active, and companies should apply for entry by 29 January The Banco de España has three months to enter companies from the time of application.

The companies and platforms that offer these cryptocurrency services may initiate the procedure in three ways: electronically, which is mandatory for legal entities and recommended for individuals; by post, and in person, the latter two options for individuals only.

Service providers must have the anti-money laundering procedures and processes in place that are required by anti-money laundering regulations. The regulations require that, in order to be registered, these entities must meet the requirements of commercial and professional integrity to operate in the market.

Article 30 of Royal Decree 84/2015, of 13 February, which implements Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions, said that the requirements are:

  • a professional track record with no negative track record in their relationship with regulatory or supervisory authorities, and no dismissals or dismissals for irregularities in previous positions;
  • asence of criminal or administrative sanctions, especially in terms of property crimes, money laundering or other socio-economic activities.
  • lack of relevant and well-founded investigations relating to the above points.

Failure to comply with the requirements of good repute will result in the loss of registration.

For this reason, it is vital that these entities are certain that they comply with all the formal requirements of Law 10/2010, of 28 April, on the prevention of money laundering and the financing of terrorism and, specifically, that they assess their compliance with these requirements of good repute, which will be a vital condition for being able to operate in the market.

By Teresa Ruano Mochales of Pinsent Masons