DeFi protocol frontend in Czech Republic

VASP Activities (Virtual Assets Only): For services exclusively involving virtual assets (e.g., crypto-to-crypto exchange, crypto custody), the Czech Republic requires registration as a trade license (živnostenské oprávnění) under the Trade Licensing Act, specifically for "Provision of services related to virtual assets." This is generally considered a "free trade" (volná živnost).

Act No. 253/2008 Coll., on Certain Measures Against Legalisation of Proceeds of Crime and Financing of Terrorism (the "AML Act"): This is the primary national law transposing the EU AML directives. It was amended to include VASPs as obliged entities.

Act No. 455/1991 Coll., the Trade Licensing Act, was amended effective April 1, 2025, and further amendments will take effect July 1, 2025, affecting the regulatory framework for virtual asset service providers under Czech AML law.

Virtual Asset Exchange Services, defined as providing services for the exchange between virtual assets and fiat currencies or between one or more forms of virtual assets, are no longer subject to minimal regulation but now require specific licenses and adherence to the comprehensive EU MiCA Regulation in Czechia.

Evidence fact cz.aml.custodial-wallet-services-providing not found (may have been renamed).

Identification of the Customer:

Verification of Identity:

For non-face-to-face relationships, enhanced verification measures are required.

Understanding the Purpose and Intended Nature of the Business Relationship:

Enhanced Due Diligence (EDD):

While the Fifth Anti-Money Laundering Directive (EU 2018/843) (5AMLD) initially brought virtual asset service providers under AML/CFT scope in Czechia, the framework has evolved with newer EU regulations (e.g., MiCA, Travel Rule, upcoming AMLR/AMLD legislation by 2025) now also being relevant and superseding aspects of previous directives.

AML/CFT fines by the FAÚ for failures in compliance, which can apply to any "obliged entity," including crypto service providers. However, large, publicly detailed fines against prominent crypto platforms are not as common as in some other countries.

Criminal investigations and prosecutions for fraud, money laundering, and other criminal activities involving cryptocurrencies in Czechia target individuals, criminal organizations, and also licensed businesses and corporate entities, as demonstrated by EPPO actions involving searches at the Ministry of Industry and Trade and convictions of companies.

Regulator Name: Financial Analytical Office (FAÚ) of the Ministry of Finance.

Legal Basis: Act No. 253/2008 Coll., on Selected Measures Against Legitimisation of Proceeds of Crime and Financing of Terrorism (AML Act).

Entity Targeted: Various obliged entities, including (but not limited to) payment institutions, banks, and potentially smaller crypto service providers. Specific names and detailed violations for smaller crypto firms are not always publicly disclosed unless the fine is exceptionally large or the case is particularly egregious. Violation Type: Failure to comply with anti-money laundering and counter-terrorist financing (AML/CFT) obligations (e.g., insufficient customer due diligence, inadequate risk assessment, failure to report suspicious transactions). Penalty Amount: Varies significantly depending on the severity and scale of the violation. Fines can range from tens of thousands CZK to millions CZK. FAÚ annually publishes statistics on fines but not always specific details for each entity unless it's a high-profile case. Outcome: Improved AML compliance among obliged entities, deterrence of future violations.