Romania has taken the first steps to regulating digital currencies, crypto wallets, and crypto exchanges, fully adopting the EU’s 5AMLD. 

The Fifth Anti-Money Laundering and Terrorism Financing Directive (5AMLD), which is part of the framework created by the European Union (EU) and European Central Bank (ECB), aims to combat money laundering, terrorist financing, and tax evasion. 

Romania brings legislation up to 5AMLD standard

In July 2019, Romania implemented a law to tackle money laundering and terrorist financing, but it did not meet the criteria of 5AMLD because it failed to define the categories of reporting entities – like crypto businesses, for example. 

While a case was opened against Romania in the Court of Justice of the European Union (Case C-549/18), on 1 July 2020 the government passed an Emergency Ordinance, which brought legislation up to 5AMLD standards. 

It means all exchanges offering crypto for fiat, or vice versa, in Romania, must now be registered and comply with 5AMLD standards. Companies providing “hot wallets”, i.e. those with direct and permanent access to the internet and a specific blockchain, must also comply with 5AMLD standards. 

Foreign providers must double register

Providers authorised in other EU or EEA countries, or Switzerland, may continue to offer their services in Romania only if they also register with Romania authorities, and have an authorised representative domiciled in Romania. Companies already providing such services will have 12 months to comply with the new registration requirements. 

Any exchanges operating in Romania will also need to receive technical approval from the Romanian Digital Authority. This approval process will cover issues like site security policies and technical systems. Approval will not be required for “certain EU-authorised exchange platforms” which use a simple API or gateway for Romanian customers. 

In a move that will be welcomed by crypto businesses in the country, the new legislation also prohibits banks operating in Romania from arbitrarily refusing to provide accounts to crypto or blockchain business or closing accounts based on unknown or opaque criteria. 

AYO.NEWS says:

Like other countries that have gone down the route of crypto/blockchain regulation, we expect things will continue to evolve as real-life experience proves certain plans unworkable – particularly the double-registration aspect. However, it’s definitely a step in the right direction for the Romanian blockchain and crypto sector, and the changes to how banks are required to treat the sector is long overdue. 

Earlier this year we saw Switzerland tighten its regulations, requiring ID to be provided for all crypto transactions worth more than 1,000 CHF, and the Ukraine pass similar measures, requiring monitoring of all transactions worth more than 30,000 UAH. 

‘AYO.NEWS says’ features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited or its affiliates or associates. 

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