Binance regulated in Italy: what is the state of crypto regulation?

Binance Italy receive approval from the local regulator

Last Friday, Binance, the cryptocurrency exchange, announced that it was regulated in Italy. Its Italy branch secured a virtual asset service provider (VASP) registration the Organismo per gli agenti e mediatori (OAM). Registration with the OAM is a requirement set forth by a new decree updating the crypto regulation in Italy.

Before that, the exchange had already secured a PSAN license in France and a Virtual Asset Service License in Dubai.

What is the state of crypto regulation in Italy?

The Ministero dell’Economia e delle Finanze (Ministry of Economy and finance, or MEF) recently enforced a new Decree. It was previously issued in January and it updates crypto regulation for VASPs in Italy.

The Decree of the Ministry of Economy and Finance (MEF) of January 13, 2022, published in the Official Gazette no. 40 of 17-02-2022 establishes new requirements for both Italian and foreign companies providing virtual currency services within the Italian territory. VASPs providing services like exchange and storage of virtual currencies and digital wallet service providers are within the scope of the decree.

It provides the following definitions:

• Virtual currency service provider: any natural person or entity other than a natural person who provides on a professional basis, including online, services related to the use, exchange, storage of virtual currency and their conversion from or into legal tender or digital representations of value, including those convertible into other virtual currencies as well as the services of issuing, offering, transfer and clearing services, and any other services related to the acquisition, trading or interchange of such currencies;
• Digital wallet service providers: any natural person or entity other than a natural person who provides on a professional basis, including online, services for safeguarding private cryptographic keys on behalf of its clients, for the purpose of holding, storing, and transferring virtual currencies;
• Virtual currency: the digital representation of value, neither issued nor guaranteed by a central bank or by a public authority, not necessarily linked to a legal tender, used as a medium of exchange for the purchase of goods and services or for investment purposes, and transferred, stored and traded electronically. 

Also, the Decree establishes two new requirements for in-scope VASPs namely registration with the OAM and reporting obligations.

Registration with the OAM

The Decree establishes that in-scope companies need to register with the Organismo per gli agenti e mediatori (OAM). The register maintained by the OAM includes 14 cryptocurrency companies. The full list can be found here.

Virtual currency and digital wallet service providers wishing to register with the OAM need to communicate with the agency and comply with the requirements set forth in Article 17 -bis, paragraph 2, of Legislative Decree August 13 2010, n. 141.

As per OAM’s announcement, the register in operational since May 18. Already established companies satisfying legal requirements have 60 days from that date to communicate to the OAM their operations in Italy. By doing so, they will be able to continue operations until the OAM’s decision on their registration.

Then, for companies that have not started operating by May 18, they should:

• Communicate to the OAM their intention to operate in Italy;
• Comply with the legal requirements; and
• Wait for the pronouncement of the OAM before starting their operations in the country.

Reporting obligations

Then, the decree sets reporting obligations for virtual currency and digital wallet service providers.

Each quarter registered companies registered must send records to the OAM about the transactions they carried out in Italy. More specifically, they should provide:

• Customers’ identification data such as name, first name, pale and date of birth, residence, tax code, VAT number if any, and details of the identity document
• A summary of all transactions for each customer including the counter value in euro as of the date of the last day of the relevant quarter/of the total balance of legal and virtual currencies referable to each customer, the number and the total counter value in euro as of the date of the last day of the reference quarter/of legal to virtual currency or virtual to legal currency conversion transactions referable to each customer, and the number of conversion operations between virtual currencies for instance.

Cost of non-compliance with crypto regulation in Italy

Providing virtual currency and digital wallet services without prior registration with the OAM is considered abusive. Pursuant to art. 17-bis, paragraph 5, Legislative Decree 141/2010, this can result in administrative fines from the MEF ranging from €2,065 to €10,329.

Non-compliance with crypto regulation in Italy and in other regulated countries can have consequences. Scorechain is providing blockchain analytics tools that help companies put their crypto compliance processes in line with local requirements.

You are a VASP and need to comply with the new decree? Don’t hesitate to request a demo of our crypto compliance solution to discover how it can help you comply with this new decree.

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped more than 200 customers in 45 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger, Tezos, Tron with TRC10 and TRC20 tokens, and BSC with BEP20 tokens. The software can de-anonymize the Blockchain data and connect with sanction lists to provide risk scoring on digital assets, transactions, addresses, and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.