Remote VASP serving residents in Slovakia

Registration, not a dedicated license: Currently, there isn't a specific "crypto custody license" in the traditional financial sense. However, entities providing services related to virtual assets, including custodian wallet providers, are considered "obliged entities" under Slovak AML law.

AML Obligations: This means they must comply with AML/CFT requirements, such as customer due diligence (CDD), transaction monitoring, suspicious activity reporting (SARs), and implementing internal risk management systems.

National Legislation: These obligations stem from Act No. 297/2008 Coll. on measures against the legalization of proceeds of crime and the financing of terrorism (Zákon č. 297/2008 Z. z. o ochrane pred legalizáciou príjmov z trestnej činnosti a o ochrane pred financovaním terorizmu). This Act has been amended multiple times to transpose the 4th, 5th, and 6th EU AML Directives.

Competent Authorities: For AML purposes, the Financial Intelligence Unit (FIU) within the Ministry of Interior is key, but the National Bank of Slovakia (Národná banka Slovenska - NBS) supervises financial institutions, which could include certain crypto-related activities if deemed financial services.

All other titles, including those related to CASPs and custody, will apply from December 30, 2024.

Mandatory Authorization: Under MiCA (Title V), any entity providing "custody and administration of crypto-assets on behalf of clients" (Article 68) will be considered a Crypto-Asset Service Provider (CASP) and will need to be authorized by the national competent authority. In Slovakia, this will most likely be the National Bank of Slovakia (NBS).

Act No. 297/2008 Coll. on Protection Against Legalisation of Proceeds of Crime and Against Financing of Terrorism (AML Act): This is the primary legislation in Slovakia governing AML/CFT. It has been amended multiple times, most notably by Act No. 397/2019 Coll., which transposed the 5AMLD and extended its scope to virtual assets and VASPs.

Virtual currency exchange services: Providers exchanging virtual currencies for fiat currencies, or vice versa, or between one or more forms of virtual assets.

Custodian wallet providers: Entities that provide services to safeguard private cryptographic keys on behalf of their customers, to hold, store, and transfer virtual assets.

Providers of other services related to virtual assets: This can be broadly interpreted to include other services like issuance, transfer, or administration of virtual assets.

Identification of the Customer and Verification of Identity:

Natural Persons: Full name, date of birth, place of birth, permanent address, nationality, type and number of identity document, and the issuing authority. Identity must be verified using reliable, independent sources (e.g., government-issued ID).

Legal Entities: Company name, registered address, registration number, identification of directors/management, and verification of their authority.

Identification of the Ultimate Beneficial Owner (UBO):

Continuously scrutinize transactions throughout the course of the business relationship to ensure they are consistent with the VASP's knowledge of the customer, their business, and risk profile.

Politically Exposed Persons (PEPs): Customers who are or have been entrusted with prominent public functions, their family members, or close associates.

High-risk jurisdictions: Customers or transactions involving countries identified as having strategic AML/CFT deficiencies by FATF or the European Commission.

Complex or unusually large transactions: Or transactions with an unusual pattern, without an apparent economic or lawful purpose.

New or developing technologies: Including virtual assets, where the risks may not be fully understood.

Non-face-to-face business relationships: Where there is no physical meeting with the customer.

Source of Funds (SoF) and Source of Wealth (SoW): VASPs must take reasonable measures to establish the source of funds and wealth involved in high-risk relationships or transactions.

Obligation to Report: Any transaction, attempted transaction, or activity where the VASP suspects or has reasonable grounds to suspect that funds are proceeds of criminal activity or are linked to terrorist financing.

Timing: Reports must be submitted promptly, usually immediately, once a suspicion arises.

Entity Targeted: An organized criminal group involving multiple individuals suspected of operating a sophisticated investment fraud scheme and subsequent money laundering using cryptocurrencies. Violation Type: Investment fraud, money laundering, unauthorized business activities, establishment, masterminding, and support of a criminal group. The scheme involved luring victims into fake crypto investment platforms.

Seizure of assets: During the operation, authorities seized financial assets, movable property, and real estate worth approximately €15 million. This includes accounts, cryptocurrencies, and other assets believed to be proceeds of crime.

Entity Targeted: General public, but implicitly targets any unlicensed entities or scammers operating without proper authorization or misrepresenting their services. Violation Type: Operating without required licenses (e.g., for investment services or financial advisory), offering fraudulent investment opportunities, misrepresentation of crypto products, or not adhering to AML/CFT obligations (though the latter is harder for the NBS to enforce directly against unlicensed foreign entities). Penalty Amount: No direct monetary penalty specified for the warning itself. The "penalty" is more in the form of reputational damage for entities named (if any) and increased public awareness leading to fewer victims.

Date: NBS has issued numerous warnings throughout the last 3 years, for example:

Europol (General cooperation for cybercrime, relevant to Slovak context): While not a specific Slovak action, Europol often assists NAKA in such international cases. https://www.europol.europa.eu/media-press/newsroom/news/romanian-criminal-gang-dismantled-involved-in-cryptocurrency-fraud-worth-eur-2-million (Example of a related Europol case in Romania from October 2023, illustrating the type of regional cooperation NAKA engages in).