Fintech Market Overview

This article does not constitute legal advice.

Virtual currencies in Portugal

Fintech Software

Entities that carry out any of the following activities involving virtual assets must be registered with the BoP for the purposes of verifying compliance with the applicable legal and regulatory provisions governing the prevention of money laundering and terrorist financing (ML/TF): (1) exchange services between virtual assets and fiat money or between one or more virtual assets; (2) virtual asset transfer services; and (3) services of safekeeping, or safekeeping and administration of virtual assets or of instruments that enable the control, ownership, storage or transfer of these assets, including private encrypted keys.1

ESMA has identified a number of concerns regarding the current financial regulatory framework as applies to cryptoassets. These concerns and 'gaps' fall under two categories:

  • for cryptoassets that qualify as financial instruments under MiFID, there are areas that potentially require interpretation or reconsideration of specific requirements to allow for an effective application of existing securities and financial regulations
  • where these assets do not qualify as financial instruments, the absence of applicable financial rules leaves investors exposed to substantial risks. At a minimum, ESMA believes that AML requirements should apply to all cryptoassets and activities involving cryptoassets. There should also be appropriate risk disclosure in place, so that consumers can be made aware of the potential risks prior to committing funds to cryptoassets 1

Considering the above, the usual distinction between different types of tokens (or rather, the rights and obligations that their issuance and possession entail) underlying the transactions may prove useful. Where tokens are used mainly as a means of payment, the approach taken by the BoP and the EBA is the one to look at. Conversely, where tokens share more similarities with securities, the approach taken by the CMVM and ESMA is the one to take note of.1

Law No. 58/2020 of 31 August 2020 transposed the recent AML Directive changes, extending its scope of application to virtual currencies (namely, to crypto exchanges and wallet providers offering custodial services) and imposing an obligation to register with the BoP and to comply with KYC and AML procedures with respect to their clients and the transactions taking place in their exchanges or wallets.1

Digital assets in Portugal

Fintech in Portugal

Fintech in other countries

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Portuguese Fintech Lawyers

Silvia Calls

Silvia Calls

We work for international SMEs, startups and Telco's

Viacheslav Losev

Viacheslav Losev

Legal support for FinTech and Blockchain projects

Denis Polyakov

Denis Polyakov

Comprehensive legal services for businesses on corporate, tax law, cryptocurrency legislation, investment activities

  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/portugal
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