1.  How is crypto regulated?
  2.  What are the steps taken by the regulator to adopt MiCAR? 
  3. Are the following activities regulated or unregulated in your jurisdiction? ― Direct sales of tokens by issuers— Exchange (buy/sell) ― Custody (hold) ― Borrowing/lending ― Yield/staking services— Staking on proof of stake consensus mechanisms (please indicate if NFTs are treated differently from fungible cryptoassets for each activity)
  4. Can offshore business provide services to local customers on either active solicitation or reverse solicitation basis? 
  5. How long would establishing a cryptoasset business/obtaining a license in your jurisdiction take?
  6. What would be the approximate overall cost of obtaining a licence?
  7. What is the probability (%) of success in obtaining a licence?
  8. What other limitations are there in your jurisdiction when looking to set up a cryptoasset business? E.g., Compliance requirements and physical presence

jurisdiction

Portugal

Disclaimer: This chapter was last updated on 7th May 2024 and does not reflect any subsequent developments. The information provided is intended for general informational purposes and should not be construed as legal advice.

1. How is crypto regulated?

AML RegulationAny other regulation

 

Until the Regulation on Markets in Cryptoassets (MiCA) comes into force, all of the following activities are only regulated for AML purposes. Any entities providing such services on a professional basis are required to register before the Bank of Portugal (banking regulatory authority). The Bank of Portugal’s regulatory oversight is, however, limited to AML aspects, and does not cover or otherwise monitor the activities themselves.

 

Cryptoassets as such are not regulated for any other regulatory purposes (for example in the case of regular bitcoins). However, should the cryptoassets, materially, have the characteristics of a financial or a payment instrument, then they shall be subject to the regulatory requirements applicable to such financial or payment instrument. However, this is subject to a case-by-case analysis to be carried out by the relevant competent Portuguese supervisory authorities (the Portuguese Securities Exchange Commission - CMVM or the Bank of Portugal).  

2. What are the steps taken by the regulator to adopt MiCAR? 

So far, only the CMVM has launched a public consultation (running between 8 April and 8 May) to identify who are the parties interested in operating under the MiCAR in Portugal, with a view to engaging in a productive dialogue to prepare for a smooth transition to its implementation. 

3. Are the following activities regulated or unregulated in your jurisdiction? ― Direct sales of tokens by issuers— Exchange (buy/sell) ― Custody (hold) ― Borrowing/lending ― Yield/staking services— Staking on proof of stake consensus mechanisms (please indicate if NFTs are treated differently from fungible cryptoassets for each activity)

AML RegulationAny other regulation

 

Please refer to Question 1 above. The mentioned activities are only regulated for AML purposes.

 

Please refer to Question 1 above. If the cryptoassets, materially, have the characteristics of a financial instrument or a payment instrument and therefore they fall under any existing specific regulation, then they shall be subject to the regulatory requirements arising therefrom. However, this is subject to a case-by-case examination to be carried out by the competent Portuguese supervisory authorities.

4. Can offshore business provide services to local customers on either active solicitation or reverse solicitation basis? 

AML RegulationAny other regulation

 

Businesses that offer crypto-related services to local customers (i.e., Portugal residents) must be registered before the Bank of Portugal, regardless of where such service providers are established and whether the services are being offered as a result of the client making contact with the business, i.e. reverse solicitation. 

 

Other than the AML Regulation, there is no specific regulation applicable to cryptoassets activities and services (i.e., to cryptoassets that do not fall under the specific rules applicable to financial instruments or payment instrument).

5. How long would establishing a cryptoasset business/obtaining a license in your jurisdiction take?

AML RegulationAny other regulation

 

According to the legal framework, the timeframe for establishing a business is 3 months, but it may go up to 6 months if the Bank of Portugal requests additional information. The average is usually around 5-6 months.

 

Nevertheless, when MiCAR comes into force this will change as the issuance of tokens and other cryptoasset services will become regulated.

 

Other than the AML Regulation, there is no specific regulation applicable to cryptoassets activities and services (i.e., to cryptoassets that do not fall under the specific rules applicable to financial instruments or payment instrument).

6. What would be the approximate overall cost of obtaining a licence?

AML RegulationAny other regulation

 

N/A

 

Other than the AML Regulation, there is no specific regulation applicable to cryptoassets activities and services (i.e., to cryptoassets that do not fall under the specific rules applicable to financial instruments or payment instrument).

7. What is the probability (%) of success in obtaining a licence?

AML RegulationAny other regulation

 

We note that according to our experience the Bank of Portugal is not currently granting new registrations. We understand that this is due to the fact that the Bank of Portugal may be waiting for MiCAR to enter into force.

 

Other than the AML Regulation, there is no specific regulation applicable to cryptoassets activities and services (i.e., to cryptoassets that do not fall under the specific rules applicable to financial instruments or payment instrument).

8. What other limitations are there in your jurisdiction when looking to set up a cryptoasset business? E.g., Compliance requirements and physical presence

AML RegulationAny other regulation

 

It is necessary to comply with the registration process with the Bank of Portugal and AML requirements under Portuguese law. For purposes of registration several information and documents will have to be provided in respect of the following:

  • ID information of the entity seeking to get registered, members of its corporate bodies, beneficial owners, shareholders;
  • Activity program and business plan
  • Description of internal control mechanism to ensure compliance with AML requirements
  • AML policies and procedures
  • Information systems
  • Share capital ownership and origin of the funds

 

Other than the AML Regulation, there is no specific regulation applicable to cryptoassets activities and services (i.e., to cryptoassets that do not fall under the specific rules applicable to financial instruments or payment instrument).