Any cryptovalues holder use, inter alia, the so-called e-wallets (applications for smartphones that allow, inter alia, custody and transfer of cryptocurrencies on the basis of the pair of public and private keys) for the custody and execution of transactions concerning cryptocurrencies, as well as the so-called exchanges (entities that carry out the activity of currency exchange) for the exchange of cryptocurrency into other cryptocurrency or fiat currency and vice versa.
Since miner nodes (i.e. the entities in charge of verify and settle cryptocurrency transactions) of a blockchain (the communication technology on which cryptocurrencies are based) do not verify the legal identity of cryptovalues holder, cryptocurrency transactions are pseudo-anonymus towards fiat money payments.
AML V – Directive (EU) 2018/843 of 30 May 2018 of the European Parliament and Council concerning the prevention of the use of the financial system for the purposes of money laundering or terrorist financing amending Directives 2009/138/EC and 2013/36/EU – has extended customer due diligence measures in relation to anti-money laundering to virtual currency service providers and reqired Member States set out a specific registration procedure for exchange and e-wallet providers.
Directive AML V introduced the notions of “virtual currency” “exchange” and “e-wallet provider”, it laids down that:
- “virtual currency” means “a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically”;
- “exchange” means “providers engaged in exchange services between virtual currencies and fiat currencies”, and
- “e-wallet provider” means “an entity that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies”.
Moreover, Directive AML V states that “virtual currencies should not to be confused with electronic money as defined in point (2) of Article 2 of Directive 2009/110/EC of the European Parliament and of the Council”.
Taking in consideration the Italian legal framework, the lawmaker, previously than Directive AML V, with the adoption of l. d. no. 90 of 25 May 2017 (the so-called “New Anti-Money Laundering Law”) foresaw the extension of the anti-money laundering obligations to exchanges. In particular, pursuant to Article 8(1), the provisions of Article 17-bis of l. d. no. 141 of 13 August 2010, and amending, concerning anti-money laundering had been extended to virtual currency providers, leaving to the Ministry of Economy and Finance (“MEF”) to issue a decree in order to establish requirements and timing with which the virtual currency providers are required to notify the MEF their activities in the national territory, as well as the forms of cooperation between the MED and the police forces, suitable to prohibit the offer of illigal virtual currency services.
In particular, the New Anti-Money Laundering Law extends to exchanges the customer due diligence measures concerning anti-money laundering, now echanges fall within the notion of “other non-financial operators” (defined by Article 3(5) of the AML Law), which includes, inter alia, companies service providers and trusts, entities engaged in the trading of antique goods, persons engaged in the activity of auction houses or art galleries, any person that professionaly trades gold.
Thus, pursuant to the new regulation, exchanges must be registered in a special section of the OAM register, kept by the body for the management of lists of agents in financial activities and credit brokers (OAM), set up pursuant to Article 128-undecies of the Consolidated Banking Law.
The Ministry of Economy and Finance has issued a public consultation on the implementing of decree mentioned above, which provides the obligation to notify MEF for any virtual currency provider intending to offer the service as virtual currency exchange in Italy, specifying that virtual currency providers that already offer its services in Italy on the date of entry into force of the decree, shall make the notification to MEF within sixty days since the issuance of the decree. Although, the consultation ended on 16 February 2018, to date the decree has not been issued and, as clarified by the OAM, the special section of the register for virtual currency providers is not yet operational.
Moreover, the New Anti-Money Laundering Law has extend the notion of “virtual currency” with respect to that of the Directive AML V, including into the category of virtual currency also that are used “for investment purposes” and, therefore, also tokens incorporating “financial products”.
Finally, taking in consideration e-wallet providers, the New Anti-Money Laundering Law has introduced a broader notion to that prescribed by the Directive AML V. In particular, under Article ff-bis) e-wallet providers are qualified as “any natural or legal person who provides, to third parties, on a professional basis, including online, private cryptographic key custody on behalf of its customers, in order to hold, store and transfer virtual currencies”. Therefore, the Italian lawmaker, on the one hand, has introduced the requirement of “professionalism” concerning the service and, on the other hand, has specified that the activity carried out by e-wallet providers can also (but not only) be carried out “online”, including, on the contrary, within the scope of the obligations of customer due diligence also those persons who, in a professional capacity, provide private cryptographic key custody on behalf of their offline customers.
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