Finland

## Retail_Trading_Status in Finland

**Report Date:** 2025-06-26

**Topic:** Retail_Trading_Status

**Description:** An assessment of whether individual citizens and residents in Finland are legally permitted to buy, sell, and hold cryptocurrencies. This includes detailing the regulatory environment surrounding this activity, such as KYC/AML requirements imposed on platforms and any general warnings issued.

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### **Retail_Trading_Status: Allowed-Regulated**

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**1. Current Status:** Allowed-Regulated

**2. Narrative Explanation:**

Retail trading of cryptocurrencies (referred to as virtual currencies in Finnish regulation) is legally permitted in Finland for individual citizens and residents. However, this activity is subject to a specific regulatory framework, primarily focused on anti-money laundering and countering the financing of terrorism (AML/CFT) obligations, as well as consumer protection.

Finland implemented the European Union's Fifth Anti-Money Laundering Directive (AMLD5), which brought virtual currency exchange providers and custodian wallet providers under the scope of AML/CFT supervision. The primary regulatory body overseeing these entities in Finland is the Financial Supervisory Authority (FIN-FSA).

The Act on Virtual Currency Providers (572/2019) came into force in Finland in May 2019. This act mandates that entities providing services related to virtual currencies, such as exchange platforms and custodian wallet providers, must register with the FIN-FSA. To obtain and maintain registration, these providers are required to comply with stringent requirements, including:

*   **Know Your Customer (KYC) and Customer Due Diligence (CDD):** Virtual currency providers must identify and verify their customers, monitor their transactions, and report suspicious activities to the Financial Intelligence Unit (FIU).
*   **Reliability and Fitness of Management:** The individuals responsible for the management and operations of virtual currency providers must meet certain reliability and fitness criteria.
*   **Safeguarding Client Funds:** Providers must have adequate measures in place to protect client assets.
*   **Record Keeping:** Detailed records of transactions and customer information must be maintained.

While the buying, selling, and holding of cryptocurrencies by individuals are permitted, the FIN-FSA and the Bank of Finland have issued warnings regarding the risks associated with virtual currencies. These risks include high volatility, lack of investor protection schemes comparable to traditional financial instruments, and the potential for use in illicit activities.

Taxation of cryptocurrencies is also established in Finland. Income derived from virtual currencies, such as capital gains from selling or exchanging them, is generally subject to capital income tax. The Finnish Tax Administration (Vero Skatt) provides guidance on the tax treatment of virtual currencies.

The upcoming EU-wide Markets in Crypto-Assets (MiCA) Regulation will further harmonize the regulatory landscape for crypto-assets across member states, including Finland. MiCA aims to provide a comprehensive framework covering issuers of crypto-assets, crypto-asset service providers (CASPs), and market abuse in the crypto-asset sector. This will likely lead to further refinements and enhancements of the existing Finnish regulatory framework.

In summary, individuals in Finland can legally engage in cryptocurrency trading, but they must use services from registered and regulated providers who adhere to strict AML/CFT and consumer protection measures. The regulatory environment is well-defined and supervised by the FIN-FSA, with further harmonization expected under MiCA.

**3. Relevant Text Excerpts and Sources:**

*   **Financial Supervisory Authority (FIN-FSA) - Registration of virtual currency providers:**
    *   "Virtual currency providers entered in the FIN-FSA register are obliged to comply with statutory requirements, for example, on the prevention of money laundering and terrorist financing, the segregation and safeguarding of client funds, and proper business practices, such as providing customers with adequate information on the risks related to virtual currencies."
    *   "The FIN-FSA maintains a public register of virtual currency providers that are entitled to provide virtual currency services in Finland. A virtual currency provider may be, for example, a virtual currency exchange service or a custodian wallet provider."
    *   "The Act on Virtual Currency Providers (572/2019) lays down provisions on the business operations of virtual currency providers. The objective of the Act is to ensure that virtual currency providers comply with their obligations concerning the prevention of money laundering and terrorist financing and that they safeguard client funds and provide their customers with adequate information on virtual currencies and the risks related to them."

*   **Financial Supervisory Authority (FIN-FSA) - Risks of virtual currencies:**
    *   "Virtual currencies are subject to particular risks. Their value may fluctuate significantly or be lost completely. There have also been instances of virtual currencies being used for illicit purposes, such as money laundering or terrorist financing, as well as various types of scams and fraud. In addition, virtual currency systems have been subject to cyberattacks and operational disruptions."

*   **Bank of Finland - Stance on cryptocurrencies:**
    *   While the Bank of Finland does not typically directly regulate retail trading, its stance contributes to the overall regulatory understanding. The Bank of Finland has highlighted the risks associated with cryptocurrencies and emphasized that they do not meet the legal definition of a currency or a payment instrument in Finland. However, this does not prohibit their trading as assets. (General stance often reflected in publications and speeches; specific quote for this exact point can be harder to isolate from a single, static webpage but is consistent with central bank views across the EU prior to MiCA's full implementation).

*   **Finnish Tax Administration (Vero Skatt) - Taxation of virtual currencies:**
    *   "Income from virtual currencies is subject to tax. For example, any profits you make from selling or using virtual currency are generally considered taxable capital income. If you receive virtual currency as wages or as payment for goods or services, this is considered earned income." (This is a summary of the general guidance provided by Vero Skatt. Specific detailed guidance documents are available on their website).

**4. Direct URL Links to Sources:**

1.  **FIN-FSA - Registration of virtual currency providers:** [https://www.finanssivalvonta.fi/en/financial-market-participants/registration-of-virtual-currency-providers/](https://www.finanssivalvonta.fi/en/financial-market-participants/registration-of-virtual-currency-providers/)
2.  **FIN-FSA - Act on Virtual Currency Providers:** [https://www.finanssivalvonta.fi/en/regulation/acts-governing-the-financial-sector/national-legislation/act-on-virtual-currency-providers/](https://www.finanssivalvonta.fi/en/regulation/acts-governing-the-financial-sector/national-legislation/act-on-virtual-currency-providers/)
3.  **FIN-FSA - Virtual currencies:** [https://www.finanssivalvonta.fi/en/about-the-fin-fsa/topics-in-focus/virtual-currencies/](https://www.finanssivalvonta.fi/en/about-the-fin-fsa/topics-in-focus/virtual-currencies/)
4.  **Finnish Tax Administration (Vero Skatt) - Taxation of virtual currencies (General information page, specific detailed guides are linked from here):** [https://www.vero.fi/en/individuals/property/investments/virtual-currencies/](https://www.vero.fi/en/individuals/property/investments/virtual-currencies/)