Prasos, a Finnish cryptocurrency service provider, has obtained a payment institution license, making one of the few nationally licensed Bitcoin exchange in the world.
The license was obtained through the European Union’s passport program, which allows financial services providers legally established in one member state to operate in others. Therefore, with the Finnish Financial Supervisory Authority’s license, Prasos will be licensed in all 28 European countries.
The crypto provider was required to undergo annual audits, including anti-money laundering and know your customer rules required of financial institutions.
The license is likely to open a lot of doors to banking partnerships for Prasos, which was founded in 2012 and last year reported €140 million in cryptocurrency deposits, while trading volume in its brokerage unit exceeded €220 million.
Prasos also runs websites such as Coinmotion.com, Bittiraha.fi, and Denarium, through which retail investors can exchange Bitcoins into euros. The company also hosts digital wallets for customers to store their crypto assets.
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Prasos CEO Heidi Hurskainen said the process took 1.5 years to prepare and obtain the license, “during which legislation on the EU level has become clearer.” Even though crypto regulations are not in place for Finland, the regulators take a cautious stance toward cryptocurrencies as they fear that they are aiding in money-laundering scams.
Rules vary, but all regulators are cracking down
Meanwhile, Prasos has sought to improve client identification and clear up misgivings about the origins of the funds. Earlier in 2018, the company signed an agreement with Aussie fintech iSignthis to use its Paydentity platform to process identity verification and payments.
Although it is hard to generalize the attitude towards cryptocurrency across Europe, some major countries – including in France and Germany – have repeatedly called for more discussions on the topic.
Rules vary wildly by country because of the lack of pan-European legislation. But overall, local regulators across Europe are cracking down on trading venues that lack permission to offer brokerage services. In this context, ESMA has already proposed restrictions on cryptocurrency CFDs for retail investors, including lowering the maximum leverage that companies can offer.
The European Union has previously proposed that cryptocurrency service providers be brought under the scope of its anti-money laundering and countering terrorist financing regulations.