Finland’s financial services regulator has approved five cryptocurrency service providers to operate in the country. The Finland Financial Supervisory Authority (FIN-FSA) gave the nod to the five as it continues to crack down on the industry to prevent crypto money laundering. The regulator promised to remain vigilant with the five so as to ensure they keep with their regulatory requirements.
In its press release, the FIN-FSA promised to be stringent with crypto companies, stating that “only virtual currency providers who fulfil the requirements provided by legislation may practice activities in Finland.”
To ensure that crypto companies comply with regulatory requirements, the FIN-FSA requires that they register. The companies being required to prove competence on such metrics as customer due diligence and written documentation of activities.
Hanna Heiskanen, the regulator’s senior digitalization specialist explained, “Registration that is based on anti-money laundering regulation is the first step in the regulation of virtual currency providers. Despite the registration obligation and the regulation that has now entered into force, virtual currencies are still, in many ways, high-risk investments.”
The regulator assessed the five companies before giving its nod, including whether they have adequate procedures for the prevention of money laundering and terrorist activities, their ability to safeguard their clients’ assets and the fitness of their key staff.
Despite the authorizations, the FIN-FSA reminded the public that virtual currencies are still high-risk investments. The regulator cautioned, “Supervision and registration do not affect the characteristics of virtual currencies and the risks associated with investing in virtual currencies. The risks include extreme and abrupt price volatility, information security threats on exchange platforms and wallet providers and the fact that many virtual currencies are used as speculative investments.”
Finland has been progressive on digital currencies which has led to a thriving local crypto ecosystem.