Along with the network of expert advisors within European Union in the legal and business consulting field, Gofaizen & Sherle. provides advisory service to entities in the virtual assets and blockchain areas and assists with the acquisition of the operating license in the EEA countries where these activities are protected.
The development of the digital assets and virtual values market has attracted the interest of regulatory authorities in the European Union and EEA. Thus, a legal framework has been formed in many EU states that allow the growth of digital assets oriented projects.
In accordance with the 5th Anti-Money Laundering Directive (5AMLD) of the EU, regulation of the virtual assets sector has been introduced. It is the first law that covers the entire EU territory and deals with the regulation of digital values. In this regard, virtual currency is identified as a digital representation of value that is not guaranteed by the central bank or any governmental agency and also does not have a legal status of currency and can be stored and transmitted electronically.
The definition of "virtual asset service provider" covers the following list of activities:
Regulation to digital assets in the European Union is still at an early stage. The EU is working on common principles for virtual currency regulation for all member states while individual member states are already taking different approaches that are based on the 5th Anti-Money Laundering Directive of the EU.
5AMLD establishes that service providers of virtual values must operate in accordance with the rules of combating money laundering what leads to mandatory registration with AML authorized bodies and carrying out a thorough customer due diligence (identify users, track transactions and report suspicious activity to authorities). Regulatory authorities of different EU member states develop their control practices in accordance with local legal traditions and the economy of the state. Germany, along with Spain, Italy, the Netherlands and France are applying tight regulation of virtual values. In these countries, virtual asset service providers are subject to banking act (securities trading) or payment services supervisory laws leading to higher regulatory requirements, as shown in the comparison table below.
Among the EU countries, the most favorable environment is observed in Estonia where is a clear legal definition of virtual currency status as an alternative means of payment. The activities of companies providing services in this area are regulated by the Law and are under the supervision of the Financial Intelligence Unit, which also deals with applications for the issuance of the relevant financial authorizations.