Centralized exchange in Spain

CNMV — Securities market, crypto advertising regulation (mandatory risk warnings)

Banco de Espana — VASP registration, AML/CFT

MiCA Regulation (EU) (2023) — CASP authorization, comprehensive crypto regulation

Law 10/2010 (Anti-Money Laundering) (2010) — Pre-MiCA VASP registration with Banco de Espana

VASP: CASP authorization under MiCA via CNMV/Banco de Espana. 6-12 months. Relatively reasonable registration process — attracted crypto firms.

CUSTODY: CASP authorization — custody is a licensed MiCA activity

EXCHANGE: CASP authorization under MiCA; CNMV mandatory risk warnings on all crypto marketing

Requirement: Under MiCA, providing "custody and administration of crypto-assets on behalf of clients" will require a full authorization (license) from a national competent authority (in Spain, likely the CNMV - Comisión Nacional del Mercado de Valores, or potentially the Bank of Spain, subject to national implementation laws).

Legal Basis: Regulation (EU) 2023/1114 on Markets in Crypto-assets (MiCA).

Key Provisions: Articles 53-62 of MiCA detail the authorization process and requirements for all CASPs, including those offering custody.

MiCA explicitly mandates robust rules for safeguarding client crypto-assets.

CASPs offering custody must enter into a custody agreement with clients.

They must establish and maintain an internal policy outlining how they safeguard client crypto-assets and funds.

Segregation: They must ensure the segregation of clients' crypto-assets and funds from their own assets, and from the assets of other clients, in their accounting records.

They must take adequate measures to ensure that client crypto-assets are not available to third-party creditors of the CASP.

They must establish a policy on the insolvency of the CASP.

MiCA introduces prudential requirements for CASPs.

Key Provisions (Article 67 - MiCA):

CASPs will be required to hold a minimum amount of own funds or have a professional indemnity insurance policy, or a combination of both.

The amount will depend on the type of services provided and a risk assessment. For "custody and administration of crypto-assets on behalf of clients," this prudential requirement is set at a higher tier than for some other services.

Key Provisions (Article 37 - MiCA): CASPs must "act honestly, fairly and professionally in accordance with the best interests of their clients" and "implement sound administrative arrangements, which ensure the protection of clients' data." Article 38 also requires "robust security arrangements."

Prudential requirements (capital/insurance).

Organizational requirements (governance, risk management, internal controls).

Operational requirements (IT systems, security, business continuity).

Directive (EU) 2015/849 (4th AMLD): The foundational directive, which brought more entities into scope and strengthened CDD.

Directive (EU) 2018/843 (5th AMLD): Crucially, this directive extended the scope of AML/CFT rules to include virtual asset service providers (VASPs), specifically:

Providers engaged in exchange services between virtual currencies and fiat currencies.

Custodian wallet providers.

Directive (EU) 2018/1673 (6th AMLD): Primarily focuses on harmonizing the definition of money laundering criminal offenses and related sanctions across the EU, which indirectly supports the AML framework.

Ley 10/2010, de 28 de abril, de prevención del blanqueo de capitales y de la financiación del terrorismo (Law 10/2010, of April 28, on the prevention of money laundering and terrorist financing).

Real Decreto 304/2014, de 5 de mayo, por el que se aprueba el Reglamento de la Ley 10/2010 (Royal Decree 304/2014, of May 5, approving the Regulation of Law 10/2010): This Royal Decree provides detailed rules for the implementation of Law 10/2010. It also has been amended to reflect EU changes.

Real Decreto-ley 7/2021, de 27 de abril (Royal Decree-Law 7/2021, of April 27): This specific decree transposed significant parts of the 5th AMLD, formally bringing VASPs under the scope of Law 10/2010 and establishing the requirement for their registration with the Bank of Spain.

Circular 2/2022 del Banco de España, de 23 de marzo (Circular 2/2022 of the Bank of Spain, of March 23): This circular specifically regulates the administrative registration of providers of virtual currency exchange services for fiat currency and electronic wallet custody services.

Identification and Verification of the Customer:

Natural Persons: Obtain and verify identity using reliable independent sources (e.g., national ID card, passport). Required data includes full name, date and place of birth, address, and national identification number.

Legal Persons/Entities: Obtain and verify the name, legal form, address, proof of incorporation, articles of association, names of directors, and the legal representative(s).

Identification and Verification of the Customer:

For legal entities, identify any natural person(s) who ultimately own or control 25% plus one share or more of the entity, or who otherwise exercise control.

If no such natural person is identified, identify the natural person(s) who hold the position of senior managing official(s).

Understanding the Purpose and Intended Nature of the Business Relationship:

VASPs must gather information about the client's typical transaction volumes, types of virtual assets, and the source of funds/wealth where necessary.

Ongoing Monitoring of the Business Relationship:

Scrutinizing transactions undertaken throughout the course of the relationship to ensure consistency with the VASP's knowledge of the customer, their business, and risk profile, including, where necessary, the source of funds.

Regularly updating customer information, including CDD documentation.

When CDD is Required:

Establishing a business relationship.

Carrying out occasional transactions exceeding €1,000 (whether in a single transaction or several linked transactions).

Where there is suspicion of money laundering or terrorist financing.

When there are doubts about the veracity or adequacy of previously obtained customer identification data.

Travel Rule adopted — threshold: EUR 0 (no threshold under TFR recast)

Entity Targeted: Binance (specifically, Binance Spain S.L.). Violation Type: Non-compliance with the CNMV's Circular 1/2022 on advertising of crypto-assets. The alleged violations included insufficient disclosure of risks, lack of clarity, and inadequate warnings in advertising campaigns. Outcome: Fine imposed and publicly announced. This marked a significant enforcement of Spain's relatively new crypto advertising rules.

Entity Targeted: Tools for Humanity Corp. (the company behind the Worldcoin project). Violation Type: Illicit processing of personal data (especially sensitive biometric data like iris scans), lack of transparency, insufficient information provided to users, and processing of data of minors. Penalty Amount: Precautionary measure imposing an immediate prohibition on the collection and processing of personal data by Worldcoin in Spain. A final fine amount will be determined after a full investigation, potentially reaching up to €20 million for GDPR violations. Outcome: Precautionary measure imposed, requiring Worldcoin to cease all data collection and processing activities in Spain related to its iris scanning. Investigation ongoing. This is a very significant action due to its direct operational impact and the novelty of regulating biometric data in a crypto context.

Entity Targeted: Numerous (hundreds) of unregistered entities operating in the cryptocurrency and forex markets, often referred to as "chiringuitos financieros" (financial boiler rooms). Specific examples include warnings against companies like Bitget, MEXC Global, and countless smaller, fraudulent-appearing platforms. Violation Type: Offering investment services or products related to crypto assets in Spain without the required authorization or registration with the CNMV. This often includes deceptive advertising practices. Penalty Amount: While not a single "fine," the outcome is a public warning, inclusion on the CNMV's "grey list" (list of unauthorized firms), and potential legal action or blocking of access within Spain. This effectively prohibits their operations in Spain and serves as a public consumer alert. Outcome: Prohibition of unauthorized operations in Spain, public consumer warning, and potential escalation to legal action. This proactive enforcement has been a continuous and significant effort to protect investors.

Outcome: Fine imposed and publicly announced. This marked a significant enforcement of Spain's relatively new crypto advertising rules.

Outcome: Prohibition of unauthorized operations in Spain, public consumer warning, and potential escalation to legal action. This proactive enforcement has been a continuous and significant effort to protect investors.