DeFi protocol frontend in Belarus

Presidential Decree No. 8 (2017) initially legalized cryptocurrencies and set a framework for activities like mining, exchange, and token creation in Belarus, but subsequent regulatory actions by Belarusian authorities have narrowed its scope by preapproving only 26 specific cryptocurrencies for processing by cryptobanks, imposing restrictions not present in the original decree.

HTP residency grants the right to engage in activities related to digital tokens, including their storage and transfer.

Applicants for HTP residency must submit a business plan, demonstrate a suitable business model, and comply with HTP's internal rules and oversight, including AML/CFT requirements.

Relevant Provisions in Decree No. 8: Article 4.2 of Decree No. 8 defines "cryptocurrency exchange operator" and "other operator" as entities engaging in activities like storage, transfer, and exchange of digital signs (tokens). It explicitly states that "storage of tokens on their own accounts for their clients" is an activity permitted for HTP residents.

Regulator Name: Hi-Tech Park (HTP) Administration

Decree of the President of the Republic of Belarus No. 8 "On the Development of the Digital Economy" dated December 21, 2017 (as amended): This foundational decree legalizes and regulates activities involving digital tokens (cryptocurrencies) for Hi-Tech Park residents, including exchanges, initial coin offerings (ICOs), and other related services. It explicitly mandates that HTP residents engaged in these activities must comply with AML/CFT legislation.

Identification and Verification of Customers:

For Individuals: Obtaining and verifying name, date of birth, place of residence, citizenship, passport details (series, number, date of issue, issuing authority), and sometimes tax ID number. Verification must be based on reliable, independent source documents or data.

For Legal Entities: Obtaining and verifying legal name, registration number, legal form, address of incorporation, proof of existence, details of directors/managers, and beneficial ownership information.

Identification of Beneficial Owners: VASP must identify and verify the identity of the beneficial owner(s) of the customer, regardless of the ownership structure. For legal entities, this means identifying individuals who ultimately own or control more than a certain percentage (e.g., 25%) of the entity, or who otherwise exercise control.

Risk-Based Approach: VASPs must implement a risk-based approach to CDD. This means:

Enhanced Due Diligence (EDD): Must be applied to higher-risk situations, such as transactions involving Politically Exposed Persons (PEPs), customers from high-risk jurisdictions (as identified by FATF or national authorities), complex or unusually large transactions, or situations where there are suspicions of money laundering/terrorism financing. EDD involves obtaining additional information, conducting more rigorous verification, and requiring higher-level management approval.

Ongoing Monitoring: Continuously monitoring the business relationship and transactions to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile. This includes scrutinizing transactions for unusual patterns.

Reporting Obligation: Any transaction or attempted transaction that the VASP suspects to be related to money laundering, financing of terrorism, or financing the proliferation of weapons of mass destruction, regardless of the amount, must be reported.

Reporting Authority: The reports are submitted to the Financial Monitoring Department of the State Control Committee of the Republic of Belarus.

Timing: Reports must be made without delay, typically within 24-48 hours of forming a suspicion.

No Tipping-Off: VASPs and their employees are prohibited from informing the customer or any third party that a suspicious transaction report has been or will be made.

Customer Identification Records: All documents and information obtained during the CDD process, including identity documents, beneficial ownership information, and risk assessments.

Transaction Records: Details of all virtual asset transactions, including dates, types of assets, amounts, parties involved (senders and recipients), wallet addresses, and any relevant messages or references.

Business Correspondence: Records of communications related to customer due diligence and transactions.

Suspicious Transaction Reports: Copies of all STRs submitted, along with supporting documentation and internal decision-making processes.

Hi-Tech Park Administration (HTP):

Financial Monitoring Department of the State Control Committee of the Republic of Belarus (FIU):

Entity Targeted: WhiteBird LLC (the Belarusian legal entity associated with the WhiteBIT crypto exchange). Violation Type: Failure to comply with the requirements for Hi-Tech Park residency and the norms of Decree No. 8. While specific details are often not fully disclosed by HTP, such exclusions typically stem from operational deficiencies, non-compliance with AML/CFT standards, or failure to meet the requirements of the special legal regime. Penalty Amount: Loss of HTP residency (effectively, revocation of its operating license in Belarus). No specific monetary fine for the exclusion itself is usually reported. Outcome: WhiteBird LLC was excluded from the HTP. This led to WhiteBIT announcing the cessation of services for residents of Belarus as of March 2024.

Entity Targeted: Individuals and organized criminal groups operating unregistered crypto exchanges, engaging in investment fraud schemes involving crypto, or using crypto for money laundering. Violation Type: Illegal entrepreneurial activity (operating a crypto exchange without HTP registration), fraud, money laundering, theft of crypto assets. Penalty Amount: Varies greatly. These are criminal cases, leading to arrests, investigations, and potential imprisonment, confiscation of assets, and restitution orders. The "penalty amount" is not a fixed fine but relates to the scale of the illicit activity (e.g., millions of dollars laundered or stolen) and subsequent asset seizures. Outcome: Arrests, initiation of criminal proceedings, asset seizures (including crypto and traditional assets), and potential convictions with prison sentences.

The Belarusian Agriculture and Food Ministry has opened a public consultation on a new draft law on farms, indicating that the previously referenced regulation (Pd1700008) is likely being updated or replaced.