The GEO amended the Anti Money Laundering legislation in Romania for the first time. It defined virtual currencies and allowed people to use them. The inclusion of the Romanian Tax Code in that category of taxable income is a significant step towards cryptocurrency trading in Romania.
According to the GEO, Romanian National Authorities must register and authorize entities that operate virtual currency exchanges in Romania. The law prohibits exchange service providers and distributors of digital wallets from operating without this authorization. Non-compliance with these obligations does not result in a penalty or imprisonment. Conforming to the Anti Money Laundering legislation authorized entities will become reporting entities. They are required to report suspicious transactions or suspect transactions to the National Office for Preventing and Combating Money Laundering.
Potential Romanian service providers may be discouraged by the requirements of the GEO. This is due to the requirement that they register and get a specific authorization. It is necessary to obtain an opinion from the Romanian Digitization Authority and to pay a tax in relation to it.
These requirements are favorable to the beneficiaries of the services as they provide protection against frauds and scams. We also believe they will benefit the providers. Both foreign and Romanian investors have increased their investments in cryptocurrency as it is an easy way to earn income. Those who invest in crypto currency are not protected by the Romanian legislation. Investors have traded crypto currency on suspicious platforms whose operators or owners are not known. Now, their crypto accounts are frozen and they cannot exchange them for other currencies to reap the benefits of the investment. Additionally, crypto romania currency exchange providers will benefit from the registration requirements and authorization requirements. They will have greater confidence if they follow the rules and can protect their clients’ funds after investing digital currencies.
According to the GEO, the process for obtaining authorization will be determined by the Ministry of Public Finance and Romanian Digitization Authority with collaboration from the Office for Preventing and Combating Money Laundering. The government decree will give the approval. The GEO entered into force on the 15th of July 2020. The Government Decision was to be issued in ninety days. Despite the fact that the deadline was over four months, no formal procedure has been initiated. The Romanian Digitization Authority is currently drafting a decision regarding this matter. There has been some news.
The procedure to obtain a license is not yet available despite laws that require cryptocurrencies exchange service providers register with national authorities. Service providers are therefore unable to meet this requirement. The GEO requires that both providers of digital wallets and cryptocurrency exchange services register within 12 months. This provision allows Providers to be allowed to operate in Romania during the 12-month period after the government’s decision regarding the registration procedure. However, there is no exception to the rules prohibiting this type of activity, unless it has been registered or authorized. The rules are in conflict, which raises the question whether cryptocurrency exchange activity is permitted in Romania, until the registration procedure has been published.