Anticipating the EU bodies on the AML duties regarding cryptocurrencies operators, on May 2017 the Italian legislator with Legislative Decree no. 90/2017 introduced – among others – provisions specifically addressing virtual money service providers. In the context of the abovementioned Legislative Decree virtual money service providers are defined as “[…] any natural or legal person providing to third subjects, on a professional basis, services related to the use, the exchange, the storing of virtual currencies and the exchange of such virtual currencies to (or from) legal tenders” while virtual money is defined as “[…] the digital representation of value, not issued by a central bank or a public authority, not necessarily connected to a legal tender, used as a mean of exchange to purchase goods or services and electronically transferred, stored and negotiated”.
The reform subjects virtual money service providers – to the extent that they exchange virtual currencies to (or from) legal tenders – to several AML duties, including customer due diligence duties, suspicious transactions reporting duties, etc..
In addition to the AML obligations, the reform introduced the obligation for all virtual money service providers to notify their activity with the Italian Ministry of Economy and Finance. Such communication is an essential condition for virtual money service providers to lawfully operate their business vis-à-vis Italian customers. The virtual money service providers shall also enroll with the entity in charge for keeping the registers of financial agents and credit brokers (Organismo degli Agenti e dei Mediatori – OAM). The register (which will include a special section dedicated to virtual money service providers) shall be publicly accessible.
On February 2nd the Italian Ministry of Economy and Finance published a draft Ministerial Decree (the “Draft Decree”) that, implementing the above described statutory framework, establishes the practical modalities and timing to be complied with when notifying the Italian Ministry of Economy and Finance.
The Draft Decree specifies its scope of application adopting a broad definition of virtual money service providers. According to the Draft Decree, also commercial operators accepting virtual currencies as a consideration for the provision of goods, services or other benefits shall be considered as virtual money service providers.
Furthermore, the Draft Decree provides that the existing virtual money service providers shall notify the Italian Ministry of Economy and Finance within 60 days following the entry into force of the Draft Decree.
Starting from the entry in force of the Draft Decree and until July 1st, 2018 (but this date is to be confirmed), anyone that intends to operate in Italy a virtual money service shall notify the Italian Ministry of Economy and Finance the launching of its activities. The notification shall be made by means of a certified email using the form provided in the Draft Decree. In the following 60 days, the OAM shall complete the first census of the active providers and shall start the special section of the register.
The Draft Decree is now subject to a public consultation that will end on February 16. Although generally speaking the modalities for the notification proposed by the Ministry appear not too burdensome for operators and in line with the aims of the Legislative Decree to allow the exercise of a public control over the activities carried out by virtual money service providers, the Draft Decree raises a couple of issues that are worth of a specific attention. First, it seems that the Draft Decree excessively extends the scope of application of the provisions regarding virtual money service providers. Indeed, also merchants that accept virtual money seem to be deemed as subjects that “professionally” make use of virtual money, which is not the case in the vast majority of the situations where the use of virtual money would be totally accidental in respect of the main activity carried out by the merchants. Second, from a practical standpoint the certified email chosen as exclusive mean to notify the launch of the activities would make difficult, if not impossible, for foreign companies operating in Italy to perform such notification. Indeed, the certified email is a tool that is mandatory only for Italian companies and that does not have any equivalent abroad.
The text of the Draft Decree is available here (ITA).