Education • 4 min read
Crypto is still a nascent industry and regulation is one of its growing pains. Though some companies are content with foregoing regulatory measures unless they are legally compelled to, Bitpanda proactively seeks out and applies for crypto registrations and other financial services licences in many different countries. Find out below why we do this, what those registrations and licences mean, and why you should care.
Registering as a virtual asset service provider (VASP) with a country’s regulator means that a crypto company has a validly and locally recognised Anti-Money Laundering (AML) framework which is registered with the local authorities. This registration also allows crypto companies to directly market their services in that country. In order to obtain a VASP registration, crypto companies must undergo a rigorous inspection by the local regulator demonstrating the company’s entire business model and compliance with AML and KYC requirements, as well as proving that all of their internal systems and processes are transparent and compliant.
In Europe, VASP registrations are not transferable between countries, meaning that in order to be fully recognised as a crypto business, a company has to repeat the review and inspection process anew in each jurisdiction. The time between applying and receiving a registration can take a few years, underlining that being a fully regulated crypto company takes a lot of effort, determination and patience.
We’ve mentioned it before, but it bears repeating: We believe in doing things the right way, not the easy way. That’s why Bitpanda chooses to be regulated and to proactively pursue all local cryptocurrency registrations and other financial licences where they are offered. We also comply with the Anti-Money Laundering directive AML5 and have robust KYC onboarding and verification procedures.
As at the time of publication, we are registered as a virtual asset service provider (VASP) in Austria, Germany, France, Spain, Italy, Czech Republic, and Sweden. This means that we have the highest level of crypto regulation available in each of these countries.
Bitpanda possesses multiple licences that allow us to issue and sell stocks* and ETFs* that are based on derivative contracts as well as process payments and offer other financial services.
This includes the Markets in Financial Instruments Directive, aka MiFID II, which is a regulatory framework that investment businesses must adhere to in order to protect investors, avoid market abuse, and stay fully transparent and compliant. The MiFID II licence is passportable across European borders, which is why we don’t have to pursue this type of licensing in individual countries.
We also adhere to the Revised Payment Services Directive PSD2, which allows us to accept payments from Bitpanda users and execute those payments to the intended beneficiaries. Bitpanda is also registered as an Electronic Money Institution (EMI), meaning that the regulatory authorities in Austria have granted us the ability to issue electronic money. Both the PSD2 and the EMI are passportable across all European countries in the same way that Bitpanda’s MiFID II licence is.
So what does all this mean for you, the Bitpanda user? Well, when a crypto company or financial services business obtains the registrations and licences mentioned above, you can rest assured that the company you’re sending your funds to has a legally verified business model, your money is being used for its intended purpose, and that the company your money sits with is being overseen by at least one (and in Bitpanda’s case, many) local regulators. Since these licences and registrations include a thorough investigation of the business, you as a user know that you’re not investing in some kind of scam.
Simply being registered in Austria already plays a huge role in how we operate. Regardless of where you are based, the Financial Markets Authority in Austria keeps a close eye on our business. What’s more, since Bitpanda is a European company, it must comply with the EU’s strict laws and regulations not just concerning crypto, but also its insolvency laws. These regulatory frameworks cannot be disregarded. But some businesses try to circumvent regulation by purposely operating on far away tropical islands with laxer laws and no oversight.
The EU is much more stringent in this regard than other authorities, so you can safely invest in a company that has a lot of regulatory oversight: we’re always being watched, and we like it that way.
Learn more about us, our security measures, our values and our vision for the future of investing.
This article does not constitute investment advice, nor is it an offer or invitation to purchase any digital assets.
Investing in stocks, ETFs and commodities carries risks. Conduct your own research before concluding a transaction.
* Stocks and ETFs are the underlying assets of the contracts offered as Bitpanda Stocks and are brought to you by Bitpanda Financial Services GmbH. More information about the product is available at bitpanda.com. For more details, consult the prospectus available at bitpanda.com.
This article is for general purposes of information only and no representation or warranty, either expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this article or opinions contained herein.
Investing carries risks. Make sure to conduct your own research before making any investment.
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Bitpanda GmbH ve grup şirketleri (Bitpanda) Türk Parasının Kıymetini’nin Korunması Hakkında 32 sayılı Karar’ın 2/b maddesine göre Türkiye’de yerleşik sayılan hiçbir kişiye yönelik olarak 6362 sayılı Sermaye Piyasası Kanunu başta olmak üzere Türkiye Cumhuriyeti Devleti mevzuatı hükümleri gereği Türkiye’de faaliyet izni gerektiren hiçbir sermaye piyasası faaliyetine dair hizmet sunmamaktadır. Şayet Bitpanda’nın yabancı sermaye piyasalarında vermiş olduğu hizmetlerden Türkiye’de yerleşik kişilerin faydalandığı tespit edilecek olursa tüm zararları kullanıcıya ait olmak üzere bu hizmetler ivedilikle sona erdirilecektir.
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