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Monaco

Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#199
Version
Archived
Created
2025-04-12 06:54
Workflow Stage
Live

Executive Summary

In Monaco, retail cryptocurrency trading is legally permitted for individuals and benefits from a highly advantageous tax regime. However, the ecosystem of service providers is regulated under Law No. 1.528, requiring licensing and adherence to strict AML/KYC standards. The Commission de Contrôle des Activités Financières (CCAF) is the primary regulator overseeing financial activities, with the Autorité Monégasque de Sécurité Financière (AMSF) overseeing AML/CFT compliance. Despite the favorable environment, retail trading falls under the Allowed-Regulated category.

Key Pillars

The primary regulator in Monaco is the Commission de Contrôle des Activités Financières (CCAF), which oversees financial activities related to crypto assets. The core compliance requirements include stringent Know Your Customer (KYC) and Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) procedures. Entities providing crypto-asset services must obtain prior authorization or licensing from the State Minister or the CCAF, depending on the specific activity.

Landmark Laws

  • Law No. 1.528 of 7 July 2022: Provides a regulatory framework for services related to crypto assets (including virtual financial assets, usage tokens, NFTs, and financial tokens assimilated to financial instruments), mandating that entities providing specific crypto-asset services within Monaco obtain prior authorization or licensing.

Considerations

Crypto assets do not qualify as currencies and are not subject to specific regulation. Individuals are generally not subject to income tax or capital gains tax on profits derived from personal cryptocurrency trading or investment activities. Investing in crypto assets bears risks such as the complete loss of invested funds. Strict user verification obligations, including KYC and AML regulations, are imposed on trading platforms and digital wallets.

Notes

In July 2023, the Autorité Monégasque de Sécurité Financière (AMSF) replaced SICCFIN as Monaco's Financial Intelligence Unit (FIU). The CCAF has issued public warnings regarding the risks associated with investing in crypto-assets, highlighting their volatility, lack of legal tender status, absence of central bank guarantees, and potential for fraud or loss. The sale of cryptocurrencies remains untaxed within its borders, cementing Monaco's position as a forward-thinking and adaptive economy.

Detailed Explanation

In Monaco, individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies without specific legal prohibitions. Monaco is known for its favorable tax environment, with individuals generally not subject to income tax or capital gains tax on cryptocurrency trading or investment profits. However, the cryptocurrency environment is regulated, particularly for service providers. Law No. 1.528 of 7 July 2022 provides a regulatory framework for services related to crypto assets, encompassing digital assets like virtual financial assets, usage tokens, NFTs, and financial tokens assimilated to financial instruments. This law mandates that entities providing specific crypto-asset services within Monaco obtain prior authorization or licensing. Regulated activities include the issuance of crypto assets, exchange of virtual assets for other virtual assets or legal tender, operation of negotiation platforms, custody or administration of crypto assets, and providing investment advice or executing orders. Authorization is required from the State Minister or the Commission de Contrôle des Activités Financières (CCAF), Monaco's financial markets regulator, depending on the specific activity.

Licensed entities are subject to stringent regulatory requirements, including Know Your Customer (KYC) and Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) procedures, aligning with international standards set by the Financial Action Task Force (FATF). Individuals trading on regulated Monegasque platforms will likely need to undergo identity verification. The Autorité Monégasque de Sécurité Financière (AMSF), which replaced SICCFIN in July 2023, is Monaco's Financial Intelligence Unit (FIU) and oversees compliance with AML/CFT requirements.

The CCAF has issued public warnings about the risks of investing in crypto-assets, citing volatility, lack of legal tender status, absence of central bank guarantees, and potential for fraud or loss. However, these warnings are advisories for investor prudence rather than restrictions on trading activities. According to sources like O2K (2024-10-09), HelloMonaco (2025-02-18) and the International Tax Lawyer, the sale of cryptocurrencies remains untaxed within Monaco. Delforge Law (2022-10-04) and Gordon's Blair / Transatlantic Law International (2022-09-13) highlight the specifications introduced by Law 1.528 regarding crypto asset services, resulting in a comprehensive regulatory framework. Prifinance Company notes that licensed crypto companies must analyze risks, keep records of suspicious transactions, and store customer data as per AML regulations.

Summary Points

Here's a bullet-point summary of the Retail_Trading_Status in Monaco, based on the provided report:

I. Overview: Retail Cryptocurrency Trading Status

  • Status: Allowed-Regulated
    • Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
    • No specific laws prohibit personal cryptocurrency ownership or trading.

II. Taxation

  • Favorable Tax Environment:
    • Generally, no income tax or capital gains tax on profits from personal cryptocurrency trading or investment.
    • Sale of cryptocurrencies remains untaxed.

III. Regulatory Bodies and Their Roles

  • Commission de Contrôle des Activités Financières (CCAF):
    • Monaco's financial markets regulator.
    • Authorizes certain crypto-asset services.
    • Issues public warnings regarding crypto-asset risks.
  • Autorité Monégasque de Sécurité Financière (AMSF):
    • Monaco's Financial Intelligence Unit (FIU), replacing SICCFIN in July 2023.
    • Oversees compliance with AML/CFT requirements.
  • State Minister:
    • Authorizes certain crypto-asset services.

IV. Key Legislation and Regulations

  • Law No. 1.528 of 7 July 2022:
    • Provides a regulatory framework for services related to crypto assets (virtual financial assets, usage tokens, NFTs, financial tokens assimilated to financial instruments).
    • Mandates prior authorization or licensing for entities providing specific crypto-asset services.

V. Requirements for Compliance (Service Providers)

  • Licensing:
    • Entities providing crypto-asset services within Monaco must obtain prior authorization or licensing from the State Minister or CCAF.
  • Regulated Activities Requiring Authorization:
    • Issuance of crypto assets.
    • Exchange of virtual assets for other virtual assets or legal tender.
    • Operation of negotiation platforms for virtual/digital assets.
    • Custody or administration of crypto assets.
    • Providing investment advice or executing orders related to crypto assets.
  • Know Your Customer (KYC) and Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT):
    • Licensed entities are subject to stringent KYC and AML/CFT procedures.
    • Individuals using regulated Monegasque platforms will likely need to undergo identity verification.
    • Compliance with international standards set by the Financial Action Task Force (FATF).
  • Risk Analysis and Due Diligence:
    • Exchanges and licensed companies must comprehensively analyze risks and conduct due diligence.
  • Record Keeping:
    • Keep records of "suspicious" transactions.
  • Reporting:
    • Notify law enforcement officers about "suspicious" transactions.
  • Data Storage:
    • Request and store data about customers.

VI. Notable Restrictions or Limitations

  • Warnings:
    • CCAF has issued public warnings regarding the risks associated with investing in crypto-assets (volatility, lack of legal tender status, absence of central bank guarantees, potential for fraud).
    • These warnings are advisories for investor prudence, not restrictions on activity.

VII. Recent Developments or Changes

  • Law No. 1.528 (July 2022): Established a comprehensive regulatory framework for crypto-asset services.
  • AMSF Replaced SICCFIN (July 2023): The Autorité Monégasque de Sécurité Financière (AMSF) replaced SICCFIN as Monaco's Financial Intelligence Unit (FIU).

Full Analysis Report

Financial Regulatory Analyst Report: Cryptocurrency Status in Monaco

Topic: Retail_Trading_Status
Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

1. Current Status: Allowed-Regulated

2. Detailed Narrative Explanation:

Individual citizens and residents in the Principality of Monaco are legally permitted to buy, sell, and hold cryptocurrencies. There are no specific laws prohibiting personal cryptocurrency ownership or trading activities. Monaco is known for its highly favorable tax environment for residents, which extends to cryptocurrencies; individuals are generally not subject to income tax or capital gains tax on profits derived from personal cryptocurrency trading or investment activities.

While personal trading is permitted and largely untaxed for residents, the environment in which these activities occur is regulated, particularly concerning service providers. Monaco has taken steps to establish a legal framework to oversee companies operating within the digital asset space, aiming to foster innovation while ensuring compliance with international standards, especially regarding Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT).

Key legislation, notably Law No. 1.528 of 7 July 2022, provides a regulatory framework for services related to crypto assets (referred to broadly, encompassing digital assets like virtual financial assets, usage tokens, NFTs, and financial tokens assimilated to financial instruments). This law mandates that entities wishing to provide specific crypto-asset services within Monaco must obtain prior authorization or licensing. These regulated activities include:
* Issuance of crypto assets.
* Exchange of virtual assets for other virtual assets or legal tender.
* Operation of negotiation platforms for virtual/digital assets.
* Custody or administration of crypto assets.
* Providing investment advice or executing orders related to crypto assets.

Depending on the specific activity, authorization is required either from the State Minister or the Commission de Contrôle des Activités Financières (CCAF), Monaco's financial markets regulator.

Entities licensed to operate crypto-asset services are subject to stringent regulatory requirements, including robust Know Your Customer (KYC) and AML/CFT procedures. This means that while individuals can trade freely, they will likely need to undergo identity verification processes when using regulated Monegasque platforms or services. These obligations align with international standards set by bodies like the Financial Action Task Force (FATF). Monaco's Financial Intelligence Unit (FIU), the Autorité Monégasque de Sécurité Financière (AMSF) (which replaced SICCFIN in July 2023), oversees compliance with these AML/CFT requirements.

The CCAF has issued public warnings regarding the risks associated with investing in crypto-assets, highlighting their volatility, lack of legal tender status, absence of central bank guarantees, and potential for fraud or loss. However, these warnings serve as advisories for investor prudence rather than restrictions on the activity itself.

In summary, retail cryptocurrency trading is allowed for individuals in Monaco under a highly advantageous tax regime. However, the ecosystem of service providers facilitating these activities is regulated, requiring licensing and adherence to strict AML/KYC standards, thereby placing Monaco in the Allowed-Regulated category.

3. Specific Relevant Text Excerpts:

  • On Legality and Taxation for Individuals:

    • "Regarding Monaco, the Principality offers a particularly advantageous tax regime for residents. Indeed, there is no income tax for individuals, which also includes capital gains realized on cryptocurrencies. This tax exemption is a major asset for digital asset investors..." (Source: O2K, 2024-10-09)
    • "Personal Use: Not subject to capital gains. Individuals who buy and hold digital assets can do so tax-free whether they hold them as a store of value or use them for transactions. Trading and Investment: Profits from crypto trading are tax-free." (Source: HelloMonaco, 2025-02-18)
    • "In a move that further cements its position as a forward-thinking and adaptive economy, Monaco has decreed that the sale of cryptocurrencies remains untaxed within its borders." (Source: International Tax Lawyer)

  • On Regulation of Service Providers (Law 1.528):

    • "Law 1.528 enacted on 7 July 2022... brought important specifications in the regulation of services regarding crypto assets, resulting in a comprehensive regulatory framework... The new law specifies what type of services and crypto assets undertaken in Monaco are considered as regulated activities subject to specific regulatory requirements... The new Law sets a requirement to apply for a prior licence to conduct such regulated activities in Monaco." (Source: Delforge Law, 2022-10-04)
    • "Law 1.528 operates a distinction between the provisions of services on crypto assets which are necessarily subject to a prior approval from the State Minister, and the provisions of services on crypto assets subject to a prior approval from the Commission de Contrôle des Activités Financières (“CCAF”)." (Source: Gordon's Blair / Transatlantic Law International, 2022-09-13)
    • "Companies wishing to operate in the cryptocurrency sector in Monaco must obtain a license from Monegasque authorities. These companies are subject to regular supervision, with requirements for transparency and fund security." (Source: O2K, 2024-10-09)

  • On AML/KYC Requirements:

    • "The law requires trading platforms, digital wallets, and other industry players to comply with strict user verification obligations. These obligations include rigorous measures to comply with KYC (Know Your Customer) and AML regulations. This means that anyone wishing to trade or use cryptocurrencies must prove their identity to prevent any illicit use of digital assets." (Source: O2K, 2024-10-09)
    • "Businesses that deal in crypto are, however, required to comply with AML and KYC regulations... The Autorité Monégasque de Sécurité Financière (AMSF), Monaco's financial intelligence unit, oversees all compliance with the said requirements." (Source: HelloMonaco, 2025-02-18)
    • "The AML regulations operating over Europe provide that exchanges and companies that have received a license for cryptocurrencies must comprehensively analyze risks (conduct due diligence), keep records of “suspicious” transactions and notify law enforcement officers about them... request and store data about customers of the cryptocompany..." (Source: Prifinance Company)

  • On Official Warnings:

    • "WARNING ON CRYPTO-ASSETS / ICO. The Commission de Contrôle des Activités Financières (CCAF) warns the public that crypto-assets (such as Bitcoin, Ethereum, Ripple, Monoeci etc.)... do not qualify as currencies and are not subject to a specific regulation [Note: This predates Law 1.528 regarding services]... Crypto-assets subscription bears a number of risks such as the complete loss of invested funds... the CCAF advises any person who plans to invest part of his / her savings in crypto-assets to be extremely prudent..." (Source: AMAF / Monaco For Finance, citing CCAF warning)

4. Direct URL Links to Sources:

  • O2K (Taxation & Regulation Overview): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAJsi_KAIOQn_Pan3OxRETHMRPetMgvmiCunf0JEDSoOPBpegDga308bUsNTZmyKnIzhUAJSvICDbCDbjSYed2Dzu7CiuvmRt8xy2PnYGKgv0qX0_oo3NQvbQmDP9s5zPi5TEnj218NIIOoWFZY1Qs_ZY3Qx70T8w_6dP0lm41snBYiZeO83PlCeLGpkzBBtpGd1cHK1UDtewgd8riK0-IWPpLjYA5iDJdMhXJGJ (Note: This is a search result redirect link, the original source likely requires finding the specific article on the O2K website if available)
  • HelloMonaco (Taxation & Regulation): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAIdzLBQ9uQRqsXPrO2KKijoqVums-3KOVLZMYNpWkSdAxb5KESc9TBy6wqCvcTaCY1vNOAN5pkzSHEtfMODR-hAJHuVi5vRoc2Xx3wjqox-maqhauIA8lndLPIF4fakBJ2vX3EpOXNDPREYL-AobYNZ-s7D4tPIZfp1xuC66yQKF-cR1aCfYYIasfzSlo-GOfy0PTiy-ZHTHQMj3pLEMto= (Redirect link, original article on HelloMonaco website)
  • Delforge Law (Law 1.528): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALWID192KjSWJivWizSafc10pwZNzDb3iiJTQBJoqfo7xsN-C_N9rmbPmS1p7j87HIQVSAAZURAk6qgpgwwpJE40hmEo6uO371q2RIgZChOFaorozy3a_COAj7-rDDjK1cIoc-9e85J5qQxke5lyZlAFI2vy4nMbkX5r_5Snoyb8Aup2qDNqWZ02pQPfce3 (Redirect link, original article on Delforge Law website)
  • Gordon's Blair / Transatlantic Law International (Law 1.528 Details): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAJ0egIaZuT4zGyEt1iWL-JStgx9hjy27FFpNQrDvq9-6ZYfkOWcg_Rlyg9qb_fXlPpJ3OnIuq5yY5zqkahMYEfIWmOSwdlGgGlRy6Qks6Iqov6KR5W-cDigclU4yG3BFHIiAblvK2ZF8bgBuiZVYAiLjg9tCYTNNrL_j8Kaw6aS3W1QwPt-4efAAp2MaK-_AEb7rdDHGzGcL1KlnXjodl3qhlsqCCMJgR4YHyKAILPQ6H9mUpuBeXPZv0qiok4= (Redirect link, original article likely on Gordon's Blair or Transatlantic Law websites)
  • Prifinance Company (Licensing & AML): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAIDWLgPMJwK7J__u__K-LtPV4YA3BlNYSNqQ_aA9YFMbAtd2KX3U_MDa94VTWwErXmTuXfPrqNf2vH-Lbg9T0XLBNAzjEqk9ecoTB4Dq4u4oTcwyaapomNMKpVS2AV1XybLZ5ZTYERJmFq3eRV_ (Redirect link, original article on Prifinance website)
  • AMAF (CCAF Warning): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAIRa8zXSys9fTPCht1TXMXdhizSq1ogQrORpB5NbpwUiRf-Tr-7rjSvPxxfP192sEZduJwBfC8xaF36P-WoPbEyWJQqXUblYOciOfGUayanlw7_9VNcgT-gZyOriCfs (Redirect link, original warning likely on AMAF or CCAF websites)
  • Monaco For Finance (CCAF Warning): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAJuqzqCihlhszZlyKvywa8HoTKz765YNYBo0VkEuQrTm_SM1REQJoC6Ad1bYySJJiEjnsuH5yWS3ySujFVaRdUB2KDNzlZza8NfsvmGaGPcacc9HBi3xhAJIIaAlrBTVELmNAK9hmp5VHAK_LUvzm7zNp_XBR_WZSB1gqPtK6cHtDdxKQOyfg== (Redirect link, original content on Monaco For Finance website)
  • International Tax Lawyer (Tax Status): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAJ5_A37zFDroKOMxAJP0HGS6YBcFhsazXNGP5AdDF9DDeRzAInlWxreUjGIE2vj--nOnJrFUMqdKI9rVOlrfQIP59FjgABGZBsVrAbqwPIafIDSkDFssIXLcRgZ-zF196qFKebB2CyDNr3bMikx_GJlkyhEiV5j8rXE-Y-zntg-REEWSyoN9FFt2pKY (Redirect link, original article on the firm's website)
  • Autorité Monégasque de Sécurité Financière (AMSF) - General Info (via ComplyAdvantage): https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAL2McJCssPTErGxMAi6Ml1AQoApxRMY7UYZyTxA3JDVVjiL9EA0C9LPH2CWe1wNxECK6ZgmUbD9U_TMdJ1icQNGLMw6ULdNGdyHnMDvRj8gDS8UUzJ1noHN6QebKPGLEizihHK1iWLFvYrX_oJalAB-_vba11BBjQiCv-dSa01_P00iHSWJ_mALFGC_2Oc= (Redirect link, original article on ComplyAdvantage website; official AMSF site may also contain relevant info)
  • Commission de Contrôle des Activités Financières (CCAF) - Official Site: https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAIuIcFwxWreh08mGgdrUZl3IE46ZorhWKvUSK8q6w2vBthwjY-0QLVxPlnda7j_zu8hvcYbE728LZuW_D7byawC-zyoaxw= (Redirect link to CCAF homepage)

(Note: Some URLs provided are Google Search redirect links. Accessing the original source may require navigating the respective websites.)

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