Cryptocurrency activity in Slovakia has no explicit regulation, however, the government recognizes the importance of addressing this issue and is working to create a legislative framework to regulate cryptocurrencies in the country.

Cryptocurrencies in Slovakia are not lawful coinage, since the sanctioned currency of the nation is the euro (EUR). Nevertheless, the employment and bartering of cryptocurrencies is not interdicted. To ascertain that national statutes applicable to virtual asset service facilitators are aligned with global benchmarks, the authoritative bodies of the Slovak Republic (formal appellation) have amended the subsequent enactments:

  • Income Tax Law.
  • Accounting Law.
  • Law on protection against legalization (laundering) of income.

Crypto license in Slovakia

Starting from 1 March 2022, it is compulsory in the Slovak Republic to procure a cryptocurrency permit. According to the stipulations of the Anti-Money Laundering Statute, proprietors of cryptocurrency marketplaces and remittance systems, envoys of cryptocurrency enterprises and virtual wallet purveyors are obligated to undergo a licensure process. This ordinance is designed to thwart potential fiscal deceit and the funding of illicit schemes in the realm of cryptocurrency. This entails they must institute anti-money laundering schemes, perform stringent due diligence on patrons and fiduciaries, and adhere to prerequisites for a translucent governance framework and pecuniary disclosure.

There exist sundry classifications of permits for digital currencies in Slovakia, a selection of them:

  1. Permit for crypto bourse: enables you to barter digital currencies and transmute them for conventional tender or alternative ethereal tokens.
  2. License to furnish cryptographic wallet services: Empowers you to fabricate and proffer repositories for securing digital currencies.
  3. License for the minting of cryptographic coins: Sanctions you to circulate your proprietary digital tokens.

Depending on the type of business you plan to engage in, one or more of the licenses listed above may be required. Appropriate regulatory authorities should be contacted for details and documentation.

How to obtain a crypto license in Slovakia?

To procure a permit for digital currency endeavors in Slovakia, the ensuing are obligatory Measures:

  1. Enterprise enrollment in Slovakia. Initially, you must determine the corporate structure and designate an overseer, a statutory entity, and compose a compendium of registration manuscripts.
  2. Dispatching a petition to the National Bank of Slovakia (NBS) and furnishing a thorough compendium of documents, including the organization's Charter, a roster of its progenitors, and an excerpt from the Mercantile Ledger.
  3. Verifying adherence to dependability stipulations. The enterprise must conform to all stipulations of the statutes of Slovakia and its oversight bodies in the realm of cryptographic assets. For instance, formulate a potent hazard administration framework, safeguard the secrecy of your patron information, and conform to KYC and AML norms.
  4. Inaugurating an account for a cryptographic enterprise.

Upon consummating the aforesaid phases, the enterprise may proffer a petition to the National Bank for procuring a cryptographic licensure in Slovakia. The whole process might endure sundry months, contingent on the intricacy of the entreaty.

The ordeal of procuring a cryptocurrency permit in Slovakia is rather intricate and necessitates considerable exertion and duration. To adeptly traverse the procedure, it is advisable to enlist juridical advisors specializing in the sphere of crypto asset governance in Slovakia.

Registration of a crypto company in Slovakia: What requirements must be met?

Cryptocurrency fledgling ventures in Slovakia are mandated to adhere to the ensuing statutory stipulations:

  • Financial Surveillance: Cryptocurrency enterprises are obligated to rigorously conform to financial lucidity and anti-money laundering statutes.
  • Tax Statutes: Cryptocurrency enterprises must adhere to the tax statutes of the Slovak Republic. Cryptocurrencies are not acknowledged as currency in this nation, but are embraced as investments or chattels, hence they may be levied upon when procured, vended, or acquired as earnings.
  • Data Custodianship Statutes: Cryptocurrency enterprises must adhere to data custodianship statutes to safeguard the security and confidentiality of their patrons.
  • Securities Statutes: Crypto enterprises may be susceptible to securities statutes if their tokens are deemed securities.

In broad terms, crypto ventures must adhere to prevailing statutes to safeguard their clientele and ensure their own security and competitiveness in the marketplace. Despite the absence of dedicated laws concerning crypto oversight in Slovakia, the regulatory framework could evolve henceforth. Crypto enterprises ought to track contemporary legislative modifications in this sphere and adapt promptly to them.

Application of AML rules to crypto service providers in the Slovak Republic?

The AML/CTF Act aims to curb the use of financial services to finance illegal activities such as money laundering and other illegal activities. At launching a crypto startup or registration of a crypto exchange in Slovakia such service providers will be subject to AML rules.

The following AML rules exist for cryptocurrency service providers:

  • Registration and permission: Cryptocurrency service providers must register and obtain appropriate permission from the National Bank of the country.
  • Customer Identification: Cryptocurrency service providers must carry out identification procedures for customers who use the company's services, collecting and verifying their personal data, including information about the origin of funds and the purpose of using cryptocurrencies. If the customer cannot be identified or his activities can reasonably be determined to be illegal, the company may refuse to provide the service.
  • Transaction recording: Cryptocurrency service providers must retain data about customers and their transactions for a certain period of time. These data must be made available to competent authorities upon request.
  • Control: Crypto service providers must monitor clients' financial transactions and detect and monitor suspicious transactions. In case of suspicious transactions or transactions that violate established limits, additional controls should be applied.

These are the fundamental anti-money laundering regulations that apply to service purveyors with cryptocurrency license in Slovakia, they may also be augmented by other particular regulations in accordance with local ordinances.

How do the Income Tax Act and the Accounting Act apply to crypto service providers?

Obscure currencies in Slovakia and associated transactions are regulated by the Income Tax Statute. According to this statute, gains acquired from the vendition of simulated currencies are liable to duty (for both persons and juridical bodies). Cryptic utility providers may similarly be liable to imposition based on the Slovak Tax Cipher. For instance, if they render utilities for swapping cryptic assets for conventional monies or proffer cryptic pocketbook utilities, then they may be categorized as pecuniary intercessors and subject to the duty regulations that pertain to monetary establishments.

The accounting law applies to all financial businesses, including crypto service providers. This means that service providers with license for cryptocurrency in Slovakia must maintain proper accounting records and prepare financial statements in accordance with the accounting standards applicable in the country.

According to guidelines from the Slovak Financial Administration, crypto transactions must be treated like any other financial transaction and must be properly recorded in the books of account. In addition, income and expenses associated with crypto transactions must be properly accounted for in financial statements. Accounting for cryptocurrencies may also involve measurement and recognition issues, depending on the nature of the crypto service provider's business.

Conclusion

In recent years, due to benefits such as decentralization, transparency and security, cryptocurrencies and blockchain projects have attracted the maximum number of users. One of the main factors in the acceptance of cryptocurrencies has been their potential as a means of exchange and storage of value. Users around the world have begun to actively use cryptocurrencies to purchase goods, conduct financial transactions and invest.

Blockchain technology has also found applications in various industries beyond the financial sector. Companies and organizations have begun to use blockchain to improve data accounting and storage systems, increase transparency and reliability of information, and increase process efficiency.

The governments of most countries in the world are implementing regulation of cryptocurrencies. Some of the main reasons for introducing regulation of such activities include:

  • Anti-Money Laundering: Because cryptocurrency transactions can be anonymous and untraceable, they can be used to commit fraud and money laundering. Regulation can help prevent such crimes.
  • Investor protection. An unregulated cryptocurrency market can be associated with fraud and manipulation. Regulatory measures help protect investors from potential risks.
  • Consumer Protection: Some cryptocurrencies can be risky for consumers, especially inexperienced investors. Regulation can help protect consumers from such risks.
  • Financial system security: Virtual currencies can become a threat to the financial system if they are used for malicious purposes. Regulation can help prevent such threats.
  • Compliance with laws: Cryptocurrencies can be used for illegal transactions. Regulation of the crypto-asset market can help prevent such illegal activities and enforce laws.
  • Taxation. Cryptocurrencies create new tax challenges. Regulation of cryptocurrency activities allows governments to develop tax policies that take into account the use of cryptocurrencies and minimize tax evasion.
  • Promoting innovation. Regulation can create a legal and regulatory framework for the development of blockchain technologies, encouraging innovation in this area.
  • The international cooperation. Governments joining forces will promote international cooperation in regulating cryptocurrencies to prevent their use for illegal purposes.

As we have already said, this country does not yet have legislation specifically designed to control and supervise crypto activities. But the situation may change in the future, especially after the introduction of MiCA legislation at EU level. Overall, the Slovak digital technology market is in constant flux, and the future of cryptocurrencies and blockchain projects remains promising.

TK Deal experts can offer our clients personalized consultations on regulation of cryptocurrencies in European countries, provide assistance at the stage of collecting the necessary documents or offer support of cryptocurrency activities in Europe.

The publication is for informational purposes only. Leave a request for a consultation with the company’s specialists on our website and get answers to your questions on the topic of the article.