How the Money Laundering Prevention Law affects cryptocurrencies

Crypto physical wallets

The new Law on the Prevention of Money Laundering, which was passed last April 28, will force cryptocurrency users to register, and services exchanging virtual currency for legal tender – and vice versa – will be supervised by the authorities, as well as e-wallet and virtual wallet companies.

The new legislation was passed last April 28th

What will this mean for cryptocurrency owners and those who want to invest in cryptocurrencies in the future? From Bonatti Compliance they assure that the reinforcement of the identification system will lead to greater guarantees of the activity, which, in principle, seems positive.

Let’s go deeper into what the new legislation entails. First of all, it should be noted that the new law will apply to any person or company that wants to acquire Bitcoin, Ethereum or any other cryptocurrency in Spain or with a company operating in Spain.

The law establishes a number of requirements that will change the way in which exchange or cryptocurrency custody companies deal with customers. For example, they will be required to have formal identification in order to own cryptocurrencies. It will not require an ID card, but a standardized digital ID, in accordance with European regulations.

A beneficial ownership declaration is also going to be required. Companies providing crypto-asset services will have to have a process for identifying the natural persons behind the legal entities as owners or decision makers.

The beneficial owners are all natural persons who hold more than 25% of the capital of companies, of a legal entity, such as a limited company or limited liability company. “The objective is simply a formal declaration of who are the natural persons who make the decisions within the company that owns the bitcoins,” says Francisco Bonatti, managing partner of Bonatti Compliance.

The law also entails the obligation to identify the activity of the company or natural person who owns the bitcoins. For example, they will be forced to indicate the origin of the funds of the money with which they want to acquire the bitcoins or, if they already have them and want to keep them in that company, the keys of where those bitcoins have been obtained.

In addition, the law will make it mandatory to track the activity, just as it happens in banking institutions. Thus, companies will have to use alerts in case any unusual behavior of any of the customers is detected.

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