What is Italy’s New Regulaltion for Cryptocurrency Companies?

The Economy and Finance Ministry has concluded to a new legal framework for merchants and exchanges related to cryptocurrency.

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The public consultations regarding a new regulatory frame for cryptocurrency companies in Italy are now finished. The Ministry of Economy and Finance invited the interested parties to share comments and suggestions on a draft decree, including reporting requirements and registration in the industry. The new regulation will come into force within three months of adoption.

The ministerial plan was designed in a way to understand and explore the different aspects of the cryptocurrency phenomenon. The official order aims to implement improved and updated anti-money laundering laws. It was published on Feb. 2 by MEF’s Treasury Department. The interested parties had a 2 weeks periods in order to suggest amendments and express their opinions.

Further, the government of Italy issued another order in May 2017, requiring service providers that are related to the use of cryptocurrency, such as exchanges, to fulfill their obligations to prevent illegal crypto transactions and money laundering. This new regime includes more responsibilities for cryptocurrency businesses. They will have to report often their activities to the Ministry of Finance.

The proposed regulation makes clear that despite cryptocurrency is used as a means of exchange for the purchase of services and goods, it is not issued by a public authority or the central bank. In addition, the disclaimer claims that cryptocurrency is not necessarily connected to a legal tender currency that is a legal tender.

Merchants and Exchanges to Report and Register

Regulators highlighted that the updated Italian regulation will comply with the latest European Anti-Money Laundering Directive. It implements stricter rules in order to prevent financial crimes. Italy adopted the previous directive on May 25, 2017.

How will this regulation affect the individual investors?

The individuals’ use of cryptocurrencies and Bitcoin remains unregulated in Italy to a great degree. However, the parliament has introduced a law that requires identification of parties in cryptocurrency transactions. Agenzia Delle Entrate, the Italian tax authority claimed in 2016 that crypto sales and purchases are exempt from VAT. Therefore, considering some limitations, the personal crypto gains and holdings from transactions do not produce taxable income.

Also read: South Korea’s Cryptocurrency investigator Jung Ki-Joon found dead

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