New legal framework

NEW AML/CFT REGULATORY FRAMEWORK FOR VASPs

Person providing services related to virtual asset (hereinafter „VASP“) is one of the categories of obliged entity according to the Act No. 253/2008 on Selected Measures against Legitimisation of Proceeds of Crime and Financing of Terrorism (hereinafter „AML Act“).

Till 29 December 2024 VASPs as obliged entity stipulated by Section 2(1) l) of AML Act are involved among DNFBPs and must hold a trade authorization, specifically:

• Classification of trades: notifiable unqualified trades;
• Objects of business: Manufacture, trade and services not specified in Annexes 1 to 3 to the Trade Licensing Act 455/1991 Coll. (hereinafter referred to as “Trade Licensing Act”);
• Field of activity No. 81: the provision of services related to virtual assets (no. 81).

And must fulfill other legal conditions required by the national law. Applications for the aforementioned trade authorization are dealt by Trade Licence Offices (Živnostenské úřady).

From 30 December 2024 there is significant change because VASPs, as obliged entities newly stipulated by Section 2(1) b) 15. of AML Act, will be classified as financial institution. It is based on the following legislation of the European Union:

• Markets in Crypto-Assets Regulation (MiCA): REGULATION (EU) 2023/1114 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 31 May 2023 on markets in crypto-assets, and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937
• Regulation TFR: REGULATION (EU) 2023/1113 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 31 May 2023 on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849 (recast)
• Directive MiFiD: Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) – consolidated text.

Under the new rules, each VASP will have to hold a license or permission resulting from a fee-based procedure.

In case that entity provides services relating to a virtual assets under the MiCA regulation, it will have to require licensing from the Czech National Bank under that regulation. The Czech National Bank will be also national competent authority with supervisory powers.

To perform business activities relating to a virtual assets, which are not covered by the MiCA regulation (i.e. crypto-assets that are unique and not fungible with other crypto-assets), the entity must obtain an authorisation from FAÚ as result of the permit procedure newly stipulated in the AML Act (effective from 30. 12. 2024).

Entities providing crypto-asset services in accordance with national applicable laws before 30 December 2024 may continue to do so until 31 July 2025 or until they are granted or refused a MiCA authorisation. The same rule is applicable for FAÚ´s permission.