Central Bank of Spain issues new registration guidelines for cryptocurrency service providers
The central bank of Spain has introduced a new registry for cryptocurrency service providers (VASPs). The latter is required to sign up with the bank as a show of compliance to Anti-Money Laundering (AML) regulations.
VASPs refer to individuals or financial and banking institutions that provide crypto services like trading and custody. All will be required to register regardless of whether they had registered with other administrative agencies in the country. The official statement also says local institutions should register even if their customers are not located in Spain.
Additionally, individuals and legal entities representing institutions are required to provide a report to the Spain central bank. The report should contain specific efforts made to counter money laundering, terrorism, and other illegal activities. Compiling such a review would require crypto service providers to have some level of information about their customers. Moreover, the documentation should contain risk analysis and identification documents of all those in charge of enforcing compliance.
Bank of Spain publishes new VASPs registry
Companies exclusively register online, while individuals are required to do so through the electronic registry or other channels like mail. The Bank of Spain noted that it would analyze data and evaluate potential risks. While doing this, the bank will take into account the VASPs’ client types, countries of operations, and operated volumes. Other factors such as business relationship purposes would also be considered.
The Spanish central bank first announced the crypto service providers’ registry in June, according to local news agency El País. At the time, the bank noted that further guidelines on the process would be delivered at a later time. Now, companies or individuals that continue to operate without the bank’s approval will be eligible for harsh penalties. Failure to register attracts fines as high as $11.6 million.
Balancing innovation and crime prevention
Spain is among many other nations attempting to establish a balance between allowing innovative financial technology while preventing the propagation of illegal activities.
In August, Spain through its National Commission for Securities Markets (CNMV) issued a warning to 12 crypto-related companies. The likes of Huobi Global and Bybit crypto exchanges were warned of possible sanctions if they failed to register with the commission. The CNMV noted that it could not ban these companies but certain court measures would make their operations difficult.
Also in the same month, Spanish lawmakers backed a legal initiative that legalizes the use of cryptocurrencies for mortgages and insurances.
Other nations that are also enforcing crypto-related regulations include Brazil, Italy, and Malaysia. Earlier this month, Brazil’s Special Committee of the Chamber of Deputies approved a bill imposing stricter penalties on crypto-related financial crimes. Italy and Malaysia are pursuing Binance on money-laundering allegations as the two nations tighten the grip to ensure investor protection.