Crypto-funded debit card in Norway

Finanstilsynet (Financial Supervisory Authority of Norway): This is the primary regulator for financial services and virtual assets in Norway. It is responsible for overseeing compliance with the Anti-Money Laundering Act, including the registration of Virtual Asset Service Providers (VASPs).

Anti-Money Laundering Act (Hvitvaskingsloven) – June 1, 2018 (as amended):

This act transposes the EU's 5th Anti-Money Laundering Directive (AMLD5) into Norwegian law. It defines "virtual currency services" and mandates that entities providing such services (Virtual Asset Service Providers or VASPs) must register with Finanstilsynet.

Registered VASPs are subject to comprehensive AML/CTF obligations, including Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting.

Financial Institutions Act (Finansforetaksloven) – April 10, 2015:

Future Legislation: Markets in Crypto-Assets (MiCA) Regulation (EU Regulation 2023/1114) – Adopted by EU in May 2023:

Entities offering virtual asset services, including crypto exchanges operating in Norway, are required to register with Finanstilsynet as Virtual Asset Service Providers (VASPs) under the Anti-Money Laundering Act.

Registration entails strict adherence to AML/CTF requirements, including:

VASP Registration: Companies that provide services for the exchange or custody of virtual assets are considered "virtual asset service providers" (VASPs) and must register with Finanstilsynet. This is an AML/CTF (Combatting the Financing of Terrorism) registration, not a full financial services license in the traditional sense, unless the specific virtual asset qualifies as a financial instrument under other legislation.

Requirements for Registration: To register, companies must demonstrate compliance with the Money Laundering Act, which includes:

Reporting suspicious transactions to Økokrim (National Authority for Investigation and Prosecution of Economic and Environmental Crime).

E-money: If a stablecoin meets the definition of electronic money under the Financial Institutions Act (Finansforetaksloven), which transposes the EU E-money Directive (2009/110/EC), it would be classified as e-money. This typically applies to tokens that:

Electronic Money Tokens (EMT): These are crypto-assets that aim to maintain a stable value by referencing the value of a single fiat currency (e.g., a NOK-pegged stablecoin). They are explicitly defined as "electronic money" under MiCA.

E-money Classification: Issuers would require a license as an e-money institution (e-pengeforetak) from Finanstilsynet, in accordance with the Financial Institutions Act.

Issuers must be authorized as a credit institution (bank) or an e-money institution.

An e-money institution license is sufficient if the issuer only issues EMTs.

Taxable Event: A taxable event occurs when you dispose of your cryptocurrency, which includes:

Using crypto to purchase goods or services.

Tax Rate: Capital gains from cryptocurrency are taxed as ordinary income (alminnelig inntekt).

Basis Method: Skatteetaten typically requires the use of the FIFO (First-In, First-Out) method for calculating the acquisition cost when multiple units of the same cryptocurrency have been purchased at different times.

Valuation: The fair market value (FMV) of all owned cryptocurrencies as of December 31st each year must be reported.

Entity Targeted: Kryptobørs AS (a Norwegian crypto exchange). Violation Type: Failure to comply with anti-money laundering (AML) regulations, inadequate internal controls, and operating without proper registration/licensing as a virtual asset service provider (VASP) for all services offered. Penalty Amount: Ordered to terminate its business. No specific monetary fine was publicized in connection with this specific order, but the cessation of operations is a severe penalty. Outcome: Finanstilsynet ordered Kryptobørs AS to terminate its business as a virtual asset service provider due to significant and persistent breaches of the Anti-Money Laundering Act and related regulations. This was a decisive action to remove a non-compliant entity from the market.

Entity Targeted: Norges Kryptobørs AS (a Norwegian crypto exchange). Violation Type: Failure to comply with anti-money laundering (AML) regulations, specifically regarding inadequate risk assessment, customer due diligence (CDD) procedures, and not being properly registered for all types of currency exchange services offered. Penalty Amount: Ordered to cease providing currency exchange services involving fiat currency. No specific monetary fine was publicized in connection with this order, but the restriction on services is a significant penalty. Outcome: Finanstilsynet ordered Norges Kryptobørs AS to stop offering services involving the exchange between virtual and fiat currencies due to serious deficiencies in its AML compliance framework. The firm was permitted to continue offering exchange services between virtual assets.