The Bank of Spain enables the registration of service providers for the exchange of virtual currency for fiat currency and the custody of electronic purses.

This registry, which was regulated in Spain last April with the aim of adapting Spanish regulations to the Fifth Directive on the prevention of money laundering and terrorist financing (AML/CFT), introduces a series of special features that must be taken into account by providers of virtual currency exchange and custody services.

The Bank of Spain has just set up the new registry for virtual currency exchange and custody service providers. This register was provided for in the second additional provision of Law 10/2010, of April 28, 2010, on the prevention of money laundering and terrorist financing (LPBC) introduced with Royal Decree-Law 7/2021, of April 27, 21, on the transposition of European Union directives in the areas of competition, prevention of money laundering, credit institutions, telecommunications, tax measures, prevention and repair of environmental damage, posting of workers in the provision of transnational services and consumer protection.

Implementing the provisions of Directive (EU) 2018/843 (known as the V Directive on AML/CFT), the LPBC includes as new parties obliged to comply with the regulations in this area “providers of services of exchange of virtual currency for fiat currency and custody of electronic wallets”. It should be remembered that for the purposes of the AML/CFT regulations, the providers of exchange or custody services of electronic purses are considered financial entities, and therefore they cannot benefit from all the exceptions to compliance with the internal control rules that the Regulations of the LPBC provide for non-financial entities. Derived from this obligation and in order to guarantee adequate monitoring of compliance, the same regulation provides for the obligation of the Bank of Spain to set up a registry in which these suppliers must be registered.

The particularities of this register are as follows:

Not only providers not subject to the supervision of a competent authority must be registered, but also those regulated entities already registered in the corresponding administrative registers in charge of the competent authority that provide these services.
The registration obligation extends to those providers who:
act in Spain without an establishment (by having the direction or management of their activities outside Spain or being a legal entity established outside Spain); or
act outside Spain but are established or domiciled (in the case of companies) in Spain.
The supplier in question must pass a suitability examination in which the Bank of Spain will check whether it meets the corresponding commercial and professional honorability requirements.
Therefore, registration will be necessary when the offer of these services, the establishment or the management of its activities are located in national territory, regardless of the location of the recipients to which it refers.

REGISTRATION PROCEDURE

Registration in the registry must be carried out by the suppliers following the procedures established by the Bank of Spain and using the forms provided by the Bank of Spain:

Depending on whether the exchange service or the custody service (coin purse) is provided, form CRIPTO01 (virtual currency exchange activities) or CRIPTO03 (custody activities) must be completed.
In both cases, form CRIPTO05, relating to the declaration of commercial and professional honorability, must be completed.
Additionally, the following must be submitted together with the forms: certificate of absence of criminal record; identity document; the applicant’s manual for the prevention of money laundering and financing of terrorism; and the applicant’s risk self-assessment report.
The sending to the Bank of Spain can be made by legal entities, exclusively by telematic means, and by individuals, both by mail and by telematic means.
Once the applicant’s documentation has been reviewed, the Banco de España will resolve the application within 3 months of its receipt.