The new rule applies to exchanges and cryptocurrency custody services that operate in Spain. The European country will enable a single registry with customer data, which it will share with all of Europe.
Through a new Royal Decree-Law, Spain is tightening its regulation on Bitcoin and other cryptocurrencies and on companies that provide services related to them. The regulation aligns local regulations with European provisions against money laundering and terrorist financing.
The Spanish regulatory authorities published on April 28th the decree in the Official State Gazette. This decree incorporates into the Spanish provisions the European regulation called Directive 2018/843 (also known as AMLD5).
This official order stipulates that the Spanish authorities should register and supervise companies providing services related to cryptocurrencies. The reason for that is that they are among what they call “new obligated parties.”
European Cryptocurrency Exchanges Have to Reveal Data of Their Users
Cryptocurrency exchange companies and those that provide custody and wallets must share their customers’ data and report “suspicious activities.” That means that the regulation covers exchanges, mutual funds, and custodians of Bitcoin and other cryptocurrencies.
The authorities announced the creation of a single registration system containing the data of the users of these services, with information from the Mercantile Registry. They will cross these data with records from other countries of the European Union whose “public access [is] no longer limited to obligated parties and authorities.”
The European Union approved the current regulatory legislation on Bitcoin and other cryptocurrencies in 2018. There would be more access to information about users to eliminate anonymity in these types of transactions. They established this registry and the obligation to share data with other European jurisdictions on the same date.
However, the provision arrived in Spain later than scheduled as the European Union set a deadline until 2020 for the interconnection of European countries. The latter must share information about their customers through a central platform for the region.
The Regulation on Cryptocurrencies Exempts Europe from Sharing Data with the USA
European authorities have been searching for a unitary regulation on cryptocurrencies for a long time. The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), among other agencies, have advocated making it a reality for at least two years.
Regulators have taken measures to share the data of users of services associated with cryptocurrencies between countries of the region. They have followed recommendations of the Financial Action Task Force (FATF) such as the so-called “travel rule.”
Despite this requirement, a European court exempted companies in the region from sharing their data with others in the United States.
In other words, the authorities had to evaluate each case individually and avoid the “automatic submission” of information. The adoption of the FATF provisions would only apply to the European territory, where there would be automation. In this sense, the regulators said that the region would participate in a single registry with data from the countries.
By Willmen Blanco