Crypto-funded debit card in Finland

Financial Supervisory Authority (FIN-FSA): The primary regulator responsible for authorizing and supervising all crypto-asset service providers, ensuring compliance with anti-money laundering (AML), consumer protection standards, and operational requirements.

Financial Intelligence Unit (FIU): Operates within the National Bureau of Investigation to receive and investigate suspicious transaction reports from crypto service providers, focusing on preventing money laundering and terrorist financing.

Issuance of licenses for providers offering stablecoins and other crypto assets.

Obligations for market makers, custodial services, and exchanges to comply with stringent operational standards.

2026: Full enforcement across all covered activities.

Regulatory Engagement: Engage with Finnish authorities (e.g., The Finnish Financial Supervisory Authority) early to ensure alignment and potentially expedite the licensing process.

Regulator Name: Financial Supervisory Authority (FIN-FSA)

Providing services for exchanging virtual currency and fiat currency: This covers entities facilitating the purchase or sale of virtual currencies using traditional currencies (e.g., EUR, USD).

Providing custodial wallet services: This refers to services where an entity holds, stores, or transfers virtual currencies or private cryptographic keys on behalf of customers.

Exchanges: Both exchanges offering fiat-to-crypto and crypto-to-crypto trading services are clearly defined as "virtual currency providers" and require registration with the FIN-FSA.

Custody Providers: Entities providing "custodial wallet services" are also explicitly defined as "virtual currency providers" and require registration with the FIN-FSA. This includes services where the private keys are held by the provider on behalf of the client.

Payment Processors: This depends on the nature of the service:

For the purposes of crypto licensing, if the payment processor is directly involved in the acceptance, transfer, or conversion of virtual assets, registration as a VCP is required.

The applicant must be a Finnish limited liability company (osakeyhtiö) or a branch of a limited liability company incorporated in an EEA country.

The management of the applicant must be located in Finland. This includes the CEO and at least one other member of the board of directors.

Capital Requirements (Professional Indemnity Insurance):

The entity targeted by the FIN-FSA public warning on October 25, 2023, is Tesseract Finance Oy. The company may currently operate under the name "Stableton" (listed on FIN-FSA's registered providers list), but the enforcement action cited only refers to Tesseract Finance Oy.

The entity targeted by the FIN-FSA public reprimand on February 9, 2022, is Coinmotion Oy.

a) E-money Tokens (EMTs):

Finnish E-money Act: Laki maksulaitoksista ja sähkörahasta (297/2010) (in Finnish)

For EMTs (Articles 52-54 MiCA):

For EMTs (Article 51 MiCA):

Entity Targeted: Tesseract Finance Oy (now operating as Stableton). Violation Type: Providing virtual currency services without proper registration for a period, and deficiencies in internal control mechanisms, risk assessment, and customer due diligence processes for Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF). Penalty Amount: Public warning (julkinen varoitus). While not a monetary fine, it's a formal and significant disciplinary measure by the FIN-FSA, obliging the company to rectify its shortcomings. Outcome: The company was required to implement corrective measures to comply with the Virtual Currency Providers Act and AML/CTF obligations. The public warning serves as a significant mark on the company's regulatory record.

Entity Targeted: Coinmotion Oy (a registered virtual currency provider in Finland). Violation Type: Deficiencies in compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) obligations, specifically regarding customer due diligence, risk assessment, and internal control. The FIN-FSA found that Coinmotion's practices did not fully meet the requirements of the Act on Virtual Currency Providers and the Anti-Money Laundering Act. Penalty Amount: Public reprimand (julkinen huomautus). Similar to the public warning, this is a formal, non-monetary disciplinary action, indicating serious shortcomings that required immediate correction. Outcome: Coinmotion Oy was instructed to rectify the identified deficiencies in its AML/CTF processes to ensure full compliance with regulatory requirements.

Taxable Event: Any disposition as listed above triggers a capital gain or loss.

Capital Gains Tax Rates (Pääomatulon verokanta): Finland has a progressive capital income tax rate:

Exemption for Exchange: The European Court of Justice (ECJ) ruling in the Hedqvist case (C-264/14) established that the exchange of traditional currencies for Bitcoin (and other virtual currencies) and vice versa, as well as exchanges between different virtual currencies, constitutes the supply of services exempt from VAT. Finland follows this interpretation.