CMS Expert Guide to Crypto Regulation in Romania

The Fifth Money Laundering Directive (5MLD) extended the Fourth Money Laundering Directive (4MLD) regime to “providers engaged in exchange services between virtual and fiat currencies” and to “custodian wallet providers”.

5MLD was transposed into Romanian national law via amendments (Romanian Government Emergency Ordinance no. 111/2020 approved by Romanian Law 101/2021) to Romanian Law no. 129/2019 on AML (”AML Law”).

There is currently no other specific legislation with respect to cryptoassets other than the AML Law in Romania. The legal definitions of “providers engaged in exchange services between virtual and fiat currencies” and “custodian wallet providers” are included in AML Law.

At this moment we are not aware of the existence of any Romanian financial services regulations in respect to cryptoassets activities.

In general, except for AML Law, the cryptocurrency sector is not regulated in Romania.

However, MiCA Regulation should be observed considering that it entered into force on 29 June 2023 and will become applicable in part (provisions regarding asset-referenced tokens and e-money tokens) as of 30 June 2024, and in other parts of it as of 30 December 2024.

Under AML Law:

• the term “virtual currency” is defined as a digital representation of value that is not issued or guaranteed by a central bank or public authority. It is not necessarily linked to a legally established currency and does not have the legal status of currency or money, but is accepted by individuals or legal entities as a means of exchange and may be transferred, stored and traded electronically;
• the term “digital wallet provider” means an entity that provides services for the secured storage of private cryptographic keys on behalf of its customers for the holding, storage and transfer of virtual currency.

Borrowing / lending

With respect to borrowing/lending (of cryptoassets), even though it is not expressly regulated, it must be considered that lending is subject to license in Romania.

Exchange services

Providers of exchange services between virtual and fiat currencies, as well as the digital wallet providers have the obligation to be registered and/or authorised in order to carry out such activities.

In this respect, providers engaged in exchange services between virtual currencies and fiat currencies and digital wallet providers must comply with AML Law and be authorised by or registered with the Romanian Ministry of Public Finance, via the Foreign Exchange Licensing Commission.

Yield / staking services

In principle, crypto yield and staking services do not fall under the scope of the Romanian AML Act, except when:

• these activities fall under the scope of the financial institution provisions (security tokens, e-money tokens etc.), in which cases the Romanian AML Act may apply; and
•  they qualify as a virtual currency exchange or custodian wallet service.

When a cryptoasset qualifies as a financial instrument, the Romanian and European financial markets regulations shall apply in the performance of such activities. Respectively, in certain cases where crypto currencies may have the features of financial instruments, the currency and entities issuing, holding and/or intermediating/ performing transactions with such crypto currencies may be subject to prospectus and financial/investment services regulatory requirements similar to those instruments/service providers, features of which the crypto currency entails.

However, it must be checked in each individual case (e.g. the cryptocurrency used by the business such as security tokens, e-money tokens, etc.) if it falls under the definition of financial instruments.

In principle, in order to carry out activities related to cryptocurrency, providers must be:

• established in accordance with Romanian legislation; or
• authorised/registered by the competent authorities in a Member State of the European Union, the signatory states of the Agreement on the European Economic Area or the Swiss Confederation. Such services may be provided in Romania on the basis of a notification sent by the competent authority of the Member State to the Romanian Ministry of Public Finance via the Foreign Exchange Licensing Commission (the Commission) and the response received to this notification from the Commission. 

Legal obligations. The legal obligations of a cryptoasset business are, inter alia:

• to take KYC (Know Your Customer) measures;
• to identify the risks associated with these services and their use for criminal purposes;
• to identify the ultimate beneficiary owner;
• to monitor and report certain transactions to the authorities, etc.;
• to notify the Commission on the identification data of its authorised representative who must be domiciled in Romania and is authorised to conclude contracts on behalf of the cryptoasset business and for representation before state authorities and courts in Romania.

Marketing. Providers of networks and electronic communications services (e.g. providers of internet services, fixed or mobile telephony services, radio or TV services and cable services) are required to comply with the decisions of the Romanian Commission for authorising foreign exchange activity regarding access restriction to the websites of:

• providers of exchange services between virtual currencies and fiduciary currencies; and
• unauthorised digital wallet service providers.

Compliance requirements

• Should a cryptocurrency service fall under the scope of any of the financial services regulations (e.g., MiFID2, e-Money Directive etc.) and thus require a licence, the specific regulations’ rules and legal provisions need to be complied with when applying;
• As cryptoasset services are often sold via internet, the service provider must comply with e-commerce regulations, and if the customers are individuals/consumers, Romanian consumer protection regulations must be observed as well; 
• Compliance with Romanian tax laws must be also observed;
• If tokens are traded, regulatory restrictions may apply, depending on the circumstances of trading and the ways of reaching investors, e.g., a business-like lending activity is subject to a licence from the National Bank of Romania;
• If tokens are classified as securities and are traded on a regulated market, the issuer must observe market follow-up obligations, e.g., according to the Market Abuse Regulation (Regulation EU No. 596/2014).

Physical presence

A physical presence in Romania is not required. However, in the case of regulated cryptocurrency services, which can be provided on a cross-border basis based on passporting the licence obtained in another EU Member State, the regulator can require the company to establish a Romanian entity, such as a Romanian branch office or a subsidiary.