Aml register of cryptocompanies

AML and the new register of cryptocurrency companies in Poland

From 31 October 2021, cryptocurrency exchanges and bureaux de change will have to register with a special register of cryptocurrency companies. This is the consequence of the recent amendment to the AML Act. What is this register? Who should the application for registration be submitted to, and what exactly should it contain?
All of this is discussed in the article below!

The amendment to the AML Act (i.e. the Act of 30 March 2021 amending the Act on combating money laundering and the financing of terrorism and certain other acts ) introduced very significant changes for entrepreneurs in the cryptocurrency industry (the text of the Act, together with the course of the legislative works on it is available on the website of the Sejm). One of the new obligations is registration with a special register of cryptocurrency companies.

New regulations and mandatory registration for cryptocurrency companies

Although I have written about the most important changes before in: The new AML regulations and cryptocurrency activities, in this article, I will recall that these changes apply, in particular, to entities such as:

  • bureaux de change;
  • cryptocurrency exchanges,
  • other brokers in cryptocurrency trading, and
  • entities that are responsible for providing cryptocurrency wallets,

i.e., those entities that have previously been treated as obliged institutions.

If you are a cryptocurrency entrepreneur, you are subject to obligations under the AML Act if you provide the following services:

  • exchange services between virtual currencies and FIATs (bureaux de change, exchanges);
  • exchange services between virtual currencies (bureaux de change, exchanges);
  • brokering services between virtual currencies and FIATs or between virtual currencies (as above);
  • account maintenance services for virtual currencies (i.e. wallets).

NOTE: you are not an obligated institution if you just accept remuneration in cryptocurrencies or you are a YouTuber.

Obligation to register with the register of cryptocurrency companies

The amended AML Act introduced the principle that the provision of certain cryptocurrency services is a regulated activity. This means that such activities can only be performed after being registered with the register of virtual currency activities.

Important!

The AML Act makes it mandatory to register ‘providers of currency exchange services between virtual and fiat currencies’ and ‘virtual currency wallet providers’.

Register of cryptocurrency companies: Who is not obliged to register?

If you are trading cryptocurrencies for your own personal use or hodling cryptocurrencies, then the registration obligation does not apply to you. However, if you run a business involving the exchange of cryptocurrencies for fiat money or cryptocurrencies for cryptocurrencies, or are merely an intermediary in such exchange or in the operation of wallets or any cryptocurrency accounts, then your business will be subject to registration.

Who will be allowed to perform virtual currency activities?

At the same time, the new AML Act clearly defines who can perform virtual currency activities. Under the Act, the eligible persons include:

  • natural persons who have not been finally and legally sentenced for an intentional offence against the activities of state institutions and local government, against the administration of justice, against the credibility of documents, against property, against economic turnover and property interests in civil law transactions, against trading in money and securities, who did not collect, e.g. funds to finance a terrorist offence (the detailed conditions are described in Article 165a of the Polish Criminal Code) and who have not committed an offence intending to achieve a financial or personal gain or an intentional fiscal offence;
  • legal persons or organisational entities without legal personality  (i.e. companies) whose shareholders, who are entrusted with the conduct of the company’s affairs, or members of the management bodies have not been finally and legally convicted of any of the above offences or an intentional fiscal offence.

Persons who manage the performance of activities related to the performance of virtual currency activities and beneficiaries of the beneficial owner of such activities are also subject to the requirement of a clean criminal record.

Register of cryptocurrency companies: Requirement concerning knowledge or experience

A natural person running a business in virtual currencies should have knowledge or experience related to virtual currency activities.

According to the provisions of the AML Act, this requirement is deemed met in one of the following two cases:

  • if that person completes a training or course that covers legal or practical issues related to virtual currency activities, or
  • if that person has performed, for a period of at least one year, activities related to the virtual currency activities, which they can prove with appropriate supporting documents.

Who will keep the register of cryptocurrency companies?

The register of entities involved in cryptocurrency activities and subject to the provisions of the AML Act will be kept by the minister responsible for public finance (i.e. the Minister of Finance).

The Minister will also determine the organisational conditions and technical means of keeping this register, process information on entities registered in the register, examine applications for entry into the register, update entries and remove entities from the register.

In addition, the Minister will also have the power to impose fines on entities involved in virtual currency activities that have failed to comply with the obligation to be registered.

Important!

Remember that you can be fined up to PLN 100,000 for failing to comply with the registration obligation.

Where to register an entity involved in cryptocurrency activities and in what form?

To register as an entity involved in virtual currency activities, you should submit your application electronically.

This application should include:

  • the first name and surname or business name;
  • the number in the Register of Entrepreneurs in the National Court Register, if such a number has been assigned, and Tax Identification Number (NIP);
  • information on the services provided concerning virtual currency activities;
  • a qualified electronic signature, a trusted signature or the personal signature of the applicant.

You should also attach to the application a declaration with the contents specified in the provisions of the AML Act. On 31 October 2021, a regulation that will detail how and in what manner an application for registration is to be submitted should enter into force. The Minister of Finance will make an entry in the register within 14 days of the receipt of your application for registration together with the declaration.

How much time do I have to register my business involved in cryptocurrency activities?

The obligation to register the business involved in cryptocurrency activities is effective from 1 November 2021. However, if you were already engaged in cryptocurrency activities before this date, you have up to 6 months from the date the changes enter into force to comply with the registration obligation, i.e. until 1 May 2022. Conversely, if you are just planning to start conducting cryptocurrency activities, you will have to get the relevant registration straight away.

What does this mean in practice? It means that if you are going to open e.g. a cryptocurrency bureau de change – you should do it before 31 October .

Just being registered as a business involved in virtual currency activities is not enough!

Remember, if you professionally deal with cryptocurrencies and are an exchange, bureau de change, cryptocurrency broker, provider of wallets or other cryptocurrency accounts, you are an obliged institution. Whether you make 1 or 10 transactions a year. This means that you must comply with all the requirements imposed on the obliged institution and apply the so-called financial security measures.

If you wish to know more about crypto regulations in Poland you can check out our other articles:

New AML regulations in Poland

Taxation of the cryptocurrencies in Poland

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