Virtual currencies and digital wallets: These are two terms that are heard and used more and more widely. But what about virtual currencies and digital wallets?
Virtual currencies
Virtual currencies represent a value that is not issued by a central bank or public authority, nor is it guaranteed. It is also not necessarily linked to legally circulating currency and does not have the legal status of currency or money. On the other hand, however, it is accepted by natural or legal persons as a means of transaction and can be transferred, stored or circulated electronically.
Examples of virtual currencies are Bitcoin, LiteCoin, Ethereum, Polkadot etc. used for investment and trading.
Digital wallets
The digital wallet is the method (eg a software application) for holding, storing and transferring virtual currencies.
The digital wallet custodian service allows you to participate in the virtual currency system and facilitates transactions in virtual currencies, stores users’ private encrypted keys, holds user account balance in virtual currencies, generally stores virtual currencies and provides transactional security.
Digital wallets can be stored online (hot storage) or offline (cold storage).
It now seeks to regulate the use of virtual currencies and digital wallets by monitoring them by the competent authorities through their providers. The purpose is to control the risk of money laundering within the financial system or within virtual currency networks by terrorist groups and illegal activities.
The Hellenic Capital Market Commission announced at the beginning of the month (January 7) that the providers of virtual and documentary currency exchange services and digital wallet custody must register by January 31, 2021 in the special register, which it keeps [(Law 4557/2018, as amended by Law 4734/2020, to incorporate into Greek legislation Directive (EU) 2018/843 (AMLD V)].
These are:
Register of exchange service providers between fictitious and documentary currencies and
Register of digital wallet custodian service providers.
What is provided for registration
The relevant Registers of the Hellenic Capital Market Commission must be registered, before their activation, the Providers that intend to provide their services in Greece or from Greece to other countries.
The Providers, which are already active in Greece, are subject to the deadline of January 31st.
The process
The entry in the relevant Register includes:
– The application for registration, including information and documents submitted to the EC, for Providers natural and legal persons respectively
– Payment of a fee for the submission of the application and the processing of their registration in the relevant Register
– Annual contribution to cover supervision costs.
Sanctions
Those who do not register by this date will be subject to the sanctions of art. 46 of Law 4557/2018, as a fine, a public announcement stating the person and the nature of the violation, but also prohibitions that may reach the final prohibition of the provision of these services.