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First France, Now Finland Assigns Regulatory Body to Oversee Crypto Activities Following Bitfinex Scandal

Finland has become the latest nation to assign a regulatory body to supervise providers of virtual currency services within the country.

In a press release posted on the 26th of April, the Scandinavian country announced a new act entitled “The Act on Virtual Currency Providers”, which comes into force on May the 1st. The act defines Finland’s Financial Supervisory Authority (FIN-FSA) as the sole authority for the registration and supervision of all and any operators who wish to offer services related to digital and virtual currencies.

Companies which will be covered by the act and require FIN-FSA registration include crypto issuers, cryptocurrency exchanges and local wallet providers like Heat wallet. Registration is mandatory and will require that companies adhere to due diligence, including the maintenance of separated customer and company funds.

The usual regulatory statutory compliance requirements also apply, such as anti-money laundering (AML) procedures, sufficient client fund protection and the provision of fit and proper business operations.

Expanding EU Crypto Legislation

Several countries within The European Union (EU) have been cracking down on what some have described as ‘rogue’ cryptocurrency operators within the bloc. Authorities on the matter have suggested that cryptocurrency carries a high risk of facilitating money laundering and terrorist financing, although specific cases linking cryptocurrencies to such activities are rare.

Nevertheless, the French financial authority “Autorite des marches financiers (AMF)” recently enacting a strict framework regulating the use of cryptocurrencies within the country and urged other European nations to follow suit. While the framework makes compliance procedures for crypto businesses stricter and more complex, it also provides clarity regarding tax requirements and enforces banking institutions to allow cryptocurrency companies to register for business accounts.

Bitfinex Money-laundering Links to Poland

The new regulations follow accusations earlier this month that one of the largest cryptocurrency exchanges in the world, Bitfinex, is somehow linked to a Panamanian money-laundering scheme and Colombian drug cartels. As a result of an ongoing fraud investigation related to the construction of a Belgian embassy in the Democratic Republic of Congo, €400 million in funds were seized from an account at the Cooperative Bank in Skierniewice, Poland. The account allegedly belongs to a Panamanian man with ties to the Bitfinex cryptocurrency exchange.

At the time, Bitfinex denied the accusations and has since released a further statement refuting them after the New York attorney generals office launched a probe into the company. The NY AG filed a petition accusing Bitfinex of attempting to use Tether (USDT) tokens as liquidity to cover-up $850 million in client losses last year.

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