Activities related to cryptocurrencies are regulated in accordance with EU law. Obtaining a crypto license in Slovakia will be required primarily to comply with AML/CFT (anti-money laundering and countering the financing of terrorism) laws. Currently, the national authorities prefer a liberal approach to cryptocurrency regulation, although they have recognized the importance of innovative technologies and even started taxation. This may mean that a detailed regulatory framework for cryptocurrencies will not be developed in the near future.
How is Cryptocurrency Regulated in Slovakia?
How does the anti-money laundering regulation work?
The Fifth Money Laundering Directive (5MLD) was implemented into Slovak law by amending the Slovak Anti-Money Laundering Act. This applies to persons whose activities are related to virtual currency services, without mentioning crypto assets.
What is the regulation of financial services?
There is a wide range of legal acts to regulate financial services. These include the Securities Law, the Payment Services Law, the Stock Exchange Law, and the Financial Intermediation Law.
Importantly, crypto assets are not covered by a separate Slovak law. Slovak regulators are waiting for MiCa regulation.
Regulatory Landscape for Various Activities in this Jurisdiction
Anti-money laundering regulations
The provision of services where virtual currencies are used is regulated by the Anti-Money Laundering Act. According to this law, a virtual currency wallet service provider or a virtual currency exchange operator is an obligated entity in Slovakia.
Farming, staking, etc. are not separately regulated activities. If it is related to the exchange of virtual currencies or the provision of wallet services, such activities are regulated.
Companies that provide cryptocurrency services must comply with independent verification of their customers and identification. It will also be necessary to establish an internal policy to report suspicious activities in the area of countering terrorist financing and anti-money laundering.
Financial Services Regulation
- No license needed for buying, selling, or exchanging crypto assets.
- No license required for crypto custody (unless offering portfolio management).
- Borrowing/lending crypto assets only requires a trade license.
- Unclear if a consumer credit license is needed for lending/borrowing to consumers.
- Operating continuous, profit-based virtual asset services mandates a trade license.
- No license required for mining or transaction validation.
- Trading exchange tokens, derivatives, or managing crypto asset-containing assets may require a MiFID II or AIFM license.
The Importance of Relying on Experts When Establishing a Cryptocurrency Exchange Business
Of course, one of the most important things when registering a business is obtaining the appropriate license. With licensing, you ensure the legality of your activities and protect the interests of your clients. Before that, you need to prepare all the necessary documentation and study the requirements of regulatory authorities. In this case, it is Slovakia.
Prifinance professionals will be able to help you with this complex procedure, as they have extensive experience in obtaining licenses. It is worth adding that you can also get advice on business organization. Thanks to our in-depth knowledge of cryptocurrencies and blockchain technologies, we will develop the best solutions for you.