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Retail_Trading_Status

Allowed-Regulated Unknown
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Analysis ID
#6
Version
Archived
Created
2025-04-12 06:37
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Live

Executive Summary

Retail trading of cryptocurrencies is legally permitted in Romania but regulated, primarily focusing on AML/CFT for VASPs, and taxation of individual gains. The primary regulator is the National Office for Prevention and Control of Money Laundering (ONPCSB) and the National Bank of Romania (BNR), alongside the Financial Supervisory Authority (ASF) which have issued warnings about the risks associated with crypto assets. Law 129/2019 and Government Emergency Ordinance no. 111/2020 implement EU's AMLD5, imposing KYC/AML requirements on service providers. There are no reported legal challenges or workarounds mentioned in the report.

Key Pillars

The primary regulator for AML/CFT is the National Office for Prevention and Control of Money Laundering (ONPCSB), along with the National Bank of Romania (BNR) and the Financial Supervisory Authority (ASF) who issue warnings. Core compliance requirements include AML/CFT obligations, Know Your Customer (KYC) procedures, transaction monitoring, and suspicious activity reporting for Virtual Asset Service Providers (VASPs). VASPs must register or obtain authorization, depending on their structure and services.

Landmark Laws

  • Law no. 129/2019: Issued in 2019, it transposed the EU's 5th Anti-Money Laundering Directive (AMLD5) into national law, imposing AML/CFT obligations on providers of exchange services between virtual currencies and fiat currencies, as well as custodian wallet providers.
  • Government Emergency Ordinance no. 111/2020: Issued in 2020, it established the conditions for the registration/authorization of digital wallet providers and virtual currency exchange platforms.

Considerations

Cryptocurrencies are treated as 'income from other sources' for tax purposes, subject to a 10% income tax and potential social health contributions (CASS). Romanian authorities, including the National Bank of Romania (BNR) and the Financial Supervisory Authority (ASF), have raised concerns about the high volatility, speculative nature, and potential for illicit use of cryptocurrencies. The BNR emphasizes that cryptocurrencies are not legal tender and lack state guarantees. There are no specific currency controls mentioned impacting crypto transactions in the report.

Notes

The report notes that Romania will implement the Markets in Crypto-Assets (MiCA) Regulation, expected in 2024 and 2025, which will establish a comprehensive regulatory framework for crypto assets across the EU. There are no mentions of historical court rulings, CBDC trials, or sandbox initiatives in the report. The report also includes a disclaimer about the rapid pace of regulatory changes and advises consulting official sources or legal professionals for the most current information.

Detailed Explanation

Retail trading of cryptocurrencies is permitted in Romania, but it is a regulated activity. There is no outright ban on buying, selling, or holding crypto assets. The regulatory focus centers on Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) for Virtual Asset Service Providers (VASPs). Law No. 129/2019, which transposed the EU's 5th Anti-Money Laundering Directive (AMLD5) into national law, and Government Emergency Ordinance No. 111/2020, impose AML/CFT obligations on VASPs, including registration or authorization requirements depending on their specific structure and services. These obligations involve implementing Know Your Customer (KYC) procedures, monitoring transactions, and reporting suspicious activities to the authorities, such as the National Office for Prevention and Control of Money Laundering (ONPCSB), the Romanian Digitization Authority, or the Financial Supervisory Authority (ASF). The National Bank of Romania (BNR) has consistently stated that cryptocurrencies are not legal tender and pose financial risks due to volatility and potential for illicit use. The BNR emphasizes that users bear all risks associated with crypto transactions. The ASF also warns investors about the speculative nature and high risks of investing in cryptocurrencies and Initial Coin Offerings (ICOs), highlighting the lack of consumer protection mechanisms. Income derived from cryptocurrency transactions is subject to taxation, generally falling under "income from other sources," subject to a 10% income tax rate and potentially social health contributions (CASS) if certain thresholds are exceeded. The National Agency for Fiscal Administration (ANAF) provides guidance on this. Romania, as an EU member, will implement the Markets in Crypto-Assets (MiCA) Regulation, which will establish a comprehensive, harmonized regulatory framework across the EU, introducing licensing requirements, operational standards, market abuse rules, and investor protection measures. MiCA's full implementation is expected in 2024 and 2025, expanding regulatory oversight beyond AML/CFT towards a prudential and market conduct regime. The provided sources include the Romanian Legislation Portal for Law 129/2019, the BNR and ASF websites for press releases and investor warnings, the ANAF website for tax guidance, the CMS Law analysis on Romanian crypto regulation, and the EU Official Journal for the MiCA regulation text. This report is based on information available up to early 2025 and it is advised to consult official sources or legal professionals for the most current information.

Summary Points

Here's the converted regulatory analysis report in a clear, well-structured bullet point format:

Retail Cryptocurrency Trading Status in Romania

I. Overall Regulatory Status:

  • Allowed-Regulated: Retail trading of cryptocurrencies is legally permitted in Romania. Citizens and residents can buy, sell, and hold cryptocurrencies.

II. Key Regulatory Bodies & Their Roles:

  • National Office for Prevention and Control of Money Laundering (ONPCSB):
    • Role: Oversees AML/CFT compliance for Virtual Asset Service Providers (VASPs).
    • Involved in: Registration/authorization of VASPs.
  • National Bank of Romania (BNR):
    • Role: Issues warnings about the risks associated with cryptocurrencies.
    • Stance: Cryptocurrencies are not legal tender, highly volatile, and lack intrinsic value.
  • Financial Supervisory Authority (ASF):
    • Role: Issues warnings to investors about the speculative nature and high risks of investing in cryptocurrencies and ICOs.
    • Focus: Lack of consumer protection mechanisms.
  • National Agency for Fiscal Administration (ANAF):
    • Role: Provides guidance on taxation of cryptocurrency gains.
    • Responsibility: Individuals must declare cryptocurrency gains in their annual tax returns.
  • Romanian Digitization Authority:
    • Role: Involved in certain aspects of VASP authorization, depending on structure and services.

III. Important Legislation & Regulations:

  • Law no. 129/2019 (Transposition of EU's 5th AML Directive - AMLD5):
    • Purpose: Prevents and combats money laundering and terrorist financing.
    • Impact: Brought VASPs under AML/CFT obligations.
  • Government Emergency Ordinance no. 111/2020:
    • Purpose: Established conditions for registration/authorization of VASPs.
  • Romanian Fiscal Code (Law no. 227/2015):
    • Impact: Defines taxation rules for income from cryptocurrency transactions.
  • Markets in Crypto-Assets (MiCA) Regulation (EU):
    • Status: Upcoming EU regulation to be implemented in Romania.
    • Impact: Will establish a comprehensive, harmonized regulatory framework for crypto-asset issuers and service providers across the EU.

IV. Requirements for Compliance (VASPs):

  • Registration/Authorization: VASPs must register or obtain authorization (depending on structure and services).
  • Know Your Customer (KYC) Procedures: Implement robust KYC procedures.
  • Transaction Monitoring: Monitor transactions for suspicious activity.
  • Reporting: Report suspicious activities to the authorities.

V. Notable Restrictions or Limitations:

  • AML/CFT Obligations: Imposed on service providers (VASPs).
  • Taxation: Income from cryptocurrency transactions is subject to income tax (currently 10%) and potentially social health contributions (CASS).
  • Regulatory Warnings: BNR and ASF have issued warnings about the risks associated with cryptocurrencies.
  • No Legal Tender Status: Cryptocurrencies are not legal tender in Romania.
  • User Responsibility: Users bear all risks associated with crypto transactions.

VI. Recent Developments or Changes:

  • Implementation of EU's 5th AML Directive (Law 129/2019): Extended AML/CFT obligations to VASPs.
  • Upcoming MiCA Regulation: Will significantly expand regulatory oversight.
  • Ongoing Warnings from BNR and ASF: Continued emphasis on the risks associated with cryptocurrencies.

VII. Source Links:

Disclaimer: This report is based on information available up to early 2025. Financial regulations can change rapidly. Always consult official government sources or qualified legal/financial professionals for the most current information and advice specific to your situation.

Full Analysis Report

Okay, here is the detailed report on the current status of retail cryptocurrency trading in Romania, structured as requested.

Report: Retail Cryptocurrency Trading Status in Romania

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. Narrative Explanation:

Retail trading of cryptocurrencies (virtual currencies) is legally permitted for individuals in Romania. Citizens and residents can buy, sell, and hold these assets without a specific prohibition from authorities. However, the activity is not unregulated. The regulatory framework primarily focuses on Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) requirements for service providers, taxation of gains for individuals, and issuing warnings about the associated risks.

  • AML/CFT Regulation: Romania transposed the EU's 5th Anti-Money Laundering Directive (AMLD5) into national law through Law no. 129/2019 for preventing and combating money laundering and terrorist financing. This law, along with subsequent amendments and secondary legislation (like Government Emergency Ordinance no. 111/2020), brought providers engaged in exchange services between virtual currencies and fiat currencies, as well as custodian wallet providers (collectively, Virtual Asset Service Providers - VASPs), under AML/CFT obligations. These entities must register or obtain authorization (depending on their specific structure and services, often involving the National Office for Prevention and Control of Money Laundering - ONPCSB and potentially the Romanian Digitization Authority or ASF for certain aspects), implement robust Know Your Customer (KYC) procedures, monitor transactions, and report suspicious activities to the authorities. This means individuals using regulated Romanian or EU-operating platforms will be subject to identity verification and transaction monitoring.
  • Regulatory Warnings: While not banning crypto activities, Romanian authorities, particularly the National Bank of Romania (BNR) and the Financial Supervisory Authority (ASF), have issued warnings.
    • The BNR has repeatedly stated that cryptocurrencies are not national currency (legal tender) and pose significant financial risks due to their high volatility, lack of intrinsic value backing by state guarantees, and potential for use in illicit activities. They emphasize that users bear all risks associated with crypto transactions.
    • The ASF has also warned investors about the speculative nature and high risks of investing in cryptocurrencies and Initial Coin Offerings (ICOs), especially those offered by unregulated entities. They stress the lack of consumer protection mechanisms typically associated with regulated financial instruments.
  • Taxation: Income derived from cryptocurrency transactions by individuals is subject to taxation in Romania. It generally falls under the category of "income from other sources" and is subject to income tax (currently 10%) and potentially social health contributions (CASS) if certain thresholds are exceeded. Individuals are responsible for declaring these gains in their annual tax returns. The National Agency for Fiscal Administration (ANAF) provides guidance on this.
  • Future EU Regulation (MiCA): As an EU member state, Romania will implement the Markets in Crypto-Assets (MiCA) Regulation. MiCA will establish a comprehensive, harmonized regulatory framework across the EU for crypto-asset issuers and service providers, introducing licensing requirements, operational standards, market abuse rules, and investor protection measures. This will significantly expand the regulatory oversight beyond the current AML/CFT focus, moving towards a prudential and market conduct regime. Full implementation is expected through 2024 and 2025.

In summary, while individuals are free to trade crypto, the environment is regulated through AML/CFT obligations imposed on service providers, taxation rules for users, and cautionary stances from financial authorities. The upcoming MiCA regulation will further solidify the regulatory landscape.

3. Relevant Excerpts:

  • On AML Regulation for VASPs (Summarizing Law 129/2019 & GEO 111/2020):
    > "Romania implemented the 5th AML Directive through Law no. 129/2019... This law extended AML/CTF obligations to digital wallet providers and virtual currency exchange platforms... Government Emergency Ordinance no. 111/2020... established the conditions for the registration/authorization of digital wallet providers and virtual currency exchange platforms."

    • Source: Summary interpretation from various legal analyses (e.g., CMS Law, Schoenherr). The specific legal texts define reporting entities to include these providers.

  • On BNR's Stance (Paraphrased from multiple BNR statements):
    > "The National Bank of Romania reiterates that virtual currencies are highly volatile and risky speculative assets, lacking the characteristics of genuine currencies and not qualifying as legal tender in Romania. The BNR does not regulate or supervise these virtual currencies, and users assume all potential financial losses."

    • Source: Based on recurring themes in BNR press releases and communications regarding cryptocurrencies over recent years (e.g., statements from 2018, 2021).

  • On ASF's Warnings (Paraphrased from ASF statements/warnings):
    > "The Financial Supervisory Authority warns investors about the significant risks associated with investments in cryptocurrencies and crypto-assets, including the potential for total loss of invested capital, particularly when dealing with unregulated platforms or complex products like ICOs. These assets generally lack the consumer protection frameworks applicable to regulated financial instruments."

    • Source: Reflects the content of various warnings issued by ASF concerning crypto-assets and ICOs.

  • On Taxation (Interpretation of Fiscal Code):
    > "Income obtained by individuals from the transfer of virtual currency is considered income from other sources according to the Fiscal Code... and is subject to a 10% income tax rate on the calculated gain. Additionally, social health contributions (CASS) may be due if the total annual income from such sources exceeds specific thresholds."

    • Source: Based on interpretations of the Romanian Fiscal Code (Law no. 227/2015) and guidance from tax authorities (ANAF) and tax consultants.

4. Source Links:

Disclaimer: This report is based on information available up to early 2025. Financial regulations can change rapidly. Always consult official government sources or qualified legal/financial professionals for the most current information and advice specific to your situation.

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