Operations of a Cryptocurrency Exchange Company in Portugal

Financial technologies and virtual currencies particularly are hot subject matters in the FinTech sector among the Portuguese regulative bodies. In the past years, these state-of-the-art instruments have become a mainstream trend due to the growing value of the world’s first decentralized cryptocoin – Bitcoin, the influx of ICOs across the globe, and their market cap – total number of coins that have been mined by the price of a single coin at any given time. This popularity is also guided by some important introductions the crypto market of Portugal has experienced recently, most remarkably the rapid emergence of crypto firms and the growing tendency in the usage of cryptocoins in the last years. The following is an overview of the prospects for a cryptocurrency exchange company in Portugal. 

Cryptoassets status in Portugal

The Portuguese officials have introduced a plethora of incentives, and currently, crypto holders take advantage of the favorable environment of this country. Here, Bitcoin gains are free from a value-added tax, and crypto firms have fewer regulative barriers than in other jurisdictions.

The crypto market is under the remit of the regulative body, the Bank of Portugal. The organization approves organizations that conduct cryptopayments, and the register of such organizations is publicly available. Here, cryptocoins do not have the same status as government-issued monetary units and the country does not have distinct laws applicable only to operations with crypto coins. Operations in this field occur under common and financial branches of law. Regardless of the grounds of digital funds, their operations with them refer to client protection law and AML/TF obligations.

Overview of compliance peculiarities

The regulator focuses largely on adherence to the obligations in the domain of fighting ML/TF crimes. To the operations within which the obligations should be taken into account, we refer the following:

•         payments for exchanging digital and government-issued money;
•         digital funds transferring;
•         keeping and management for digital funds or tools that permit keeping or trading these funds.

To operate with digital currencies in Portugal, an entrepreneur should acquire an official permission and become a digital asset provider. Hence, the provider is obliged to execute the following activities to ensure the good conduct of the service provider:

•         establish the identity of clients before working with them, asking for at minimum government-issued ID documents or other documents that evidence the identity of the client;
•         Determine the purpose and the character of the business relationships;
•         Shape clients’ risk profiles on the grounds of the features of payment operations, the origin and of money;
•         Invariably check the relationships with the client;
•         Gather and store relevant data about clients and their crypto payments;
•         Develop internal and external documentation, policies, and procedures for working in the crypto sector;
•         Provide reports to the regulator promptly, including reporting on cases related to ML/TF proceeds;
•         Ensure the privacy of client and payments details as well;
•         Conduct regular education for employees in charge of acting according to accepted AML/TF standards.

These are the main obligations that a crypto exchange in Portugal must execute under the law. If you have any questions or intend to open crypto company in this jurisdiction, contact us. Our experts have a huge expertise in buying and selling businesses, as well as licensing.

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