500 000 EUR fine for unregulated crypto firms in the Czech Republic

The Czech authorities will fine unregulated crypto companies with up to half a million euro, according to a new set of rules, that will be adopted in accordance with the EU’s Fifth Anti Money Laundering Directive.

The new rules will come into force by January 2020 and are actually harsher than the requirements proposed in the EU directive.

According to the Fifth AML Directive (AMLD5) every member state should monitor and restrict any money laundering and other illegal activities that involve digital currencies. The EU rules were adopted back in 2018 leaving national regulators until the beginning of 2020 to implement them into their national legislation.

As of January 2020, all companies in the Czech Republic that in some way deal with digital currencies will have to register with the local Trade Licensing Office. If they fail to do so, they will be fined with up to 500 000 EUR or roughly 560 000 USD.

Apart from other entities crypto currency exchanges and wallet platforms also fall in the scope of AMLD5.

“For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies”, the directive states.

According some analysts the harsher regulations may drive some crypto businesses away from EU to places like Gibraltar and Switzerland.