Remote VASP serving residents in Serbia

Law on Digital Assets (Zakon o digitalnoj imovini):

This law defines digital assets, regulates their issuance and trading, and explicitly designates Virtual Asset Service Providers (VASPs) as obliged entities under the general AML/CFT law. It also sets out the licensing requirements for VASPs.

Law on the Prevention of Money Laundering and Terrorist Financing (Zakon o sprečavanju pranja novca i finansiranja terorizma)

Eligible Entities: Only legal entities registered in Serbia can apply for a VASP license. Foreign entities cannot directly provide services without establishing a Serbian legal entity.

Licensable Activities (including custody): The law defines "virtual asset services" that require a license, including:

Key Licensing Requirements: Applicants must meet stringent conditions, including:

Serbia has made strides in risk assessment and prosecution under its AML/CFT framework, but further steps are needed in supervision and effective use of financial intelligence, indicating partial rather than strict adherence to all AML/CFT regulations.

The Law on Digital Assets mandates the segregation of client assets.

Article 28(2) of the Law on Digital Assets states that a virtual asset service provider must "take all necessary measures for the safekeeping of digital assets of its clients, including the segregation of clients' digital assets from its own digital assets."

Whether Adopted: Yes, adopted. Serbia incorporated the FATF Travel Rule principles into its national legislation, primarily through the Law on Digital Assets (Zakon o digitalnoj imovini). This law specifically designates the National Bank of Serbia (NBS) as the supervisory authority for virtual asset service providers (VASPs) concerning AML/CFT compliance.

Threshold Amounts: Serbia generally follows the FATF Recommendation 16 for the Travel Rule. This means:

For cross-border transfers of digital assets: The Travel Rule applies to transactions with a value of EUR 1,000 or more.

For domestic transfers of digital assets: The Travel Rule also applies to transactions with a value of EUR 1,000 or more.

Technical Implementation Requirements: The Serbian legal framework mandates that VASPs must:

Penalties for Non-Compliance: Non-compliance with AML/CFT obligations, including the Travel Rule, can result in significant penalties, as outlined in the Law on Digital Assets and the general Law on Prevention of Money Laundering and Financing of Terrorism (Zakon o sprečavanju pranja novca i finansiranja terorizma). These penalties can include:

Entity Targeted: Various domestic entities and individuals operating crypto asset exchange or custody services without the required licenses. While specific names are not always publicly disclosed with detailed penalties, the NBS has consistently emphasized its licensing requirements and taken steps against non-compliant entities. Violation Type: Operating a virtual asset service provider (VASP) without obtaining the necessary operating license from the NBS, as mandated by the Digital Assets Law. This includes facilitating the exchange of virtual assets for fiat currency or other virtual assets, or providing custody services. Penalty Amount: Administrative fines, cessation of operations. The Digital Assets Law (Article 109, Paragraph 1, Point 1 and 2) prescribes fines ranging from RSD 100,000 to RSD 5,000,000 for legal entities and RSD 10,000 to RSD 500,000 for responsible persons within the legal entity, along with potential protective measures like a ban on conducting business. Outcome: Several entities have either ceased operations, come into compliance, or faced administrative proceedings. The NBS continues to monitor the market for unlicensed activity.

Entity Targeted: Individuals and organized criminal groups involved in large-scale crypto Ponzi schemes, investment fraud, and money laundering using virtual assets. Examples include actions related to the "Infinity Economics" scheme and connections to other global crypto scams like "Finiko.". Violation Type: Fraud, money laundering, unauthorized organization of games of chance (depending on the nature of the scheme), cybercrime. These often fall under general criminal statutes rather than specific "crypto violations.". Penalty Amount: Arrests, pre-trial detention, asset freezes (including virtual assets), criminal charges leading to potential prison sentences if convicted. Specific final conviction penalties (amounts/sentences) are rarely publicly detailed for each individual case by Serbian authorities, especially if investigations are ongoing or multi-jurisdictional. Outcome: Numerous arrests have been made, leading to ongoing investigations, indictments, and trials. Assets, including cryptocurrencies, have been seized. These cases are often complex and lengthy.

Outcome: Several entities have either ceased operations, come into compliance, or faced administrative proceedings. The NBS continues to monitor the market for unlicensed activity.