Crypto asset providers – Italian regime finally decrypted

The MEF Decree expressly envisages that, as of the date of the establishment of the relevant VASP and E-Wallet Provider register, the performance of such activities will be reserved only for those entities duly enrolled in the register.

Below is a short summary of some key issues.

Background

According to Article 17-bis of Legislative Decree no. 141 of 13 August 2010, as subsequently amended, (Decree 141), any natural or legal person who intends to act as a VASP or E-Wallet Provider in Italy is subject to a prior registration requirement with the Organismo per Agenti e Mediatori (OAM). In particular, VASPs and E-Wallet Providers should be enrolled in a specific sub-section of the OAM register for moneychangers (Register sub-section).

Decree 141 expressly envisages that, in order to be enrolled as legal persons, VASPs and E-Wallet Providers shall be incorporated in Italy or, where incorporated in an EU Member State other than Italy, shall at least have a stable organization within the Italian territory. In practice, this means that an EU VASP or EU E-Wallet Provider is eligible to (and shall) apply  to register with the OAM only where it has a branch or local organization within the Italian territory. Upon completion of the registration procedure, VASPs and E-Wallet Providers will be required to report periodically to the OAM in connection with the transactions and activities they carry out in respect of crypto-currencies on behalf of Italian clients.

The registration requirement was introduced into the Italian jurisdiction in 2017 following which the Register sub-section and relevant registration procedure should have been set out in a ministerial decree to be enacted by the Ministry of Economy and Finance but, while a draft of the above-mentioned regulation was published back in 2018, the final version has still not been made available after four years. Therefore, absent the Register sub-section and the registration procedure, market operators have continued to provide their services in relation to crypto-currencies without being registered with the OAM.

The establishment of the OAM section and the registration procedure  

The MEF Decree expressly provides that the performance of any of the following services, including through online platforms:

1. Services connected/linked to the use and/or exchange of crypto-currencies as well as their conversion into fiat money or a digital representation of value, including those convertible into other crypto-currencies;
2. the issuance or offering of crypto-currencies;
3. the transfer or clearing of crypto-currencies;
4. any other services, other than those mentioned under points 1-3 above, related/connected to purchase, trading or intermediation in a crypto-currencies exchange (such as, by way of example, the execution, reception and transmission of orders concerning crypto-currencies on behalf of third-parties or the placing of crypto-currencies); and
5. an E-Wallet service is subject to a prior registration requirement with the OAM and, thus, the relevant activities are reserved for entities duly enrolled in the Register sub-section as VASPs or E-Wallet Providers. The Register sub-section will be established by the OAM within 90 days from the date of the entry into force of the MEF Decree (approx. 18 May). Those entities operating in Italy before the setting up of the Register sub-section, including through an online Platform, will be required to apply for registration as a VASP or E-Wallet Provider with the OAM within 60 days from the date on which the Register sub-section becomes operational, provided that they are incorporated in Italy or have at least a stable organisation in Italy where incorporated in another Member State. Should those entities not comply with this deadline, they would be prevented from providing their services to Italian clients.

In order to be enrolled in the Register sub-section, VASPs and E-Wallet Providers shall follow an online procedure and shall submit to the OAM a registration form, setting forth information and data concerning the entity, such as its legal form and place of incorporation, the activities/services provided and the modalities according to which they intend to provide their services/activities to Italian clients.

The OAM, within 15 days of the date it receives the application, will communicate to the applicant confirmation of its registration (or non-registration) in the Register sub-section.

Reporting Requirements

VASPs and E-Wallet Providers enrolled in the Register sub-section shall, on a quarterly basis, provide the OAM with data and details on the crypto-currency activities and transactions they have performed and carried out in respect of Italian clients. The information to be disclosed to the Italian authority is listed under Annex 1 of the Decree and includes, inter alia, data identifying each client of the VASP and the E-Wallet Provider and the relevant data concerning each activity and/or transaction in crypto-currency which the VASP or the E-Wallet Provider has carried out and/or executed for or on behalf of that client.