Greenland

Retail_Trading_Status

Allowed-Regulated High Confidence

Analysis ID: #673
Version: Latest
Created: 2025-12-12 04:20
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Executive Summary

Retail cryptocurrency trading is legal in Greenland and regulated under the Danish financial framework, which has been explicitly extended to the territory. The primary legislation governing the sector is the Anti-Money Laundering Act (Hvidvaskloven), which was updated by Royal Decree in late 2021 to include virtual asset service providers (VASPs) as obliged entities. The Danish Financial Supervisory Authority (Finanstilsynet) serves as the competent regulator, requiring exchanges and wallet providers to register and implement AML/KYC measures. Capital gains from cryptocurrency trading are subject to taxation as personal income under the Greenlandic tax system.

Detailed Explanation

Retail cryptocurrency trading is legal and regulated in Greenland. The regulatory framework is established through the explicit extension of Danish financial legislation to the territory, as Greenland is not part of the European Union. The cornerstone of this framework is the Anti-Money Laundering Act (Hvidvaskloven), which was updated by a Royal Decree on December 29, 2021 (Decree No. 2627). This decree specifically extends the Danish AML Act's amendments to Greenland, thereby classifying providers of exchange services between virtual currencies and fiat currencies, as well as custodian wallet providers, as obliged entities. These virtual asset service providers (VASPs) must register with the competent regulator, the Danish Financial Supervisory Authority (Finanstilsynet), and implement comprehensive anti-money laundering and know-your-customer (AML/KYC) measures as mandated by the foundational Consolidation Act No. 1782 of May 17, 2021. The primary compliance requirements for operating entities include conducting risk assessments, performing customer due diligence (CDD), and reporting suspicious transactions to the authorities. For taxation, cryptocurrency gains are governed by the Greenlandic Income Tax Act (Landstingslov nr. 12 of November 2, 2006). Gains are treated as speculative income and taxed as personal income at rates that can reach approximately 42-44%, rather than under a separate capital gains regime. Losses from trading are deductible but are subject to specific, sometimes asymmetric, treatment where they are calculated separately from gains. There is no specific local cryptocurrency license; market access is managed through the AML registration process with the Danish FSA. However, significant practical limitations exist. The market is extremely small, leading most users to rely on foreign exchanges. Furthermore, Greenland relies on the Danish banking system, and Danish banks may independently block cryptocurrency-related transactions due to their own risk policies, creating an additional barrier for users and businesses.

Summary Points

I. Regulatory Status
* Retail cryptocurrency trading is legal and regulated in Greenland.
* The regulatory framework is an extension of the Danish financial system, explicitly applied to the territory.

II. Key Regulatory Bodies
* Finanstilsynet (Danish Financial Supervisory Authority): The primary regulator for the sector, responsible for the registration and supervision of virtual asset service providers (VASPs) under the AML regime.
* Skat (Greenland Tax Agency): Administers the taxation of cryptocurrency gains under the Greenlandic Income Tax Act.
* Danish Central Business Register (CVR): Handles corporate registration for businesses operating in the territory.

III. Important Legislation
* Decree on the Entry into Force for Greenland of the Anti-Money Laundering Act (Royal Decree No. 2627): Enacted on 2021-12-29. This decree explicitly extends the Danish AML Act amendments to Greenland, classifying providers of exchange services between virtual currencies and fiat currencies and custodian wallet providers as obliged entities subject to registration and AML/KYC requirements.
* Act on Measures to Prevent Money Laundering and Financing of Terrorism (Hvidvaskloven) (Consolidation Act No. 1782): The foundational AML framework, applied to Greenland as of 2021-05-17. It mandates risk assessments, customer due diligence (CDD), and the reporting of suspicious transactions for financial institutions and VASPs.
* Income Tax Act (Landstingslov om indkomstskat) (Landstingslov nr. 12): Enacted on 2006-11-02. Governs the taxation of income in Greenland, under which cryptocurrency gains are treated as speculation and taxed as personal income.

IV. Compliance Requirements
* VASPs (exchanges and custodian wallet providers) must register with the Danish Financial Supervisory Authority (Finanstilsynet).
* Registered entities are obliged entities under the AML Act and must implement full AML/KYC measures, including:
* Conducting risk assessments.
* Performing customer due diligence (CDD).
* Reporting suspicious transactions.
* Individuals must declare and pay tax on cryptocurrency trading gains to the Greenland Tax Agency (Skat).

V. Notable Restrictions or Limitations
* Taxation: Cryptocurrency gains are taxed as personal income at high rates (up to ~42-44%), not as capital gains. Losses are deductible but may be calculated separately from gains, leading to potential asymmetric treatment.
* Market Access: There is no specific local crypto license; market entry is solely through AML registration with the Danish FSA.
* Banking Access: Greenland relies on the Danish banking system, and Danish banks may block crypto transactions based on their own risk policies, creating a significant practical barrier.
* Market Size: The domestic market is extremely small, so most users rely on foreign (Danish or international) exchanges.

VI. Recent Developments or Notes
* The current regulatory framework is based on the extension of the Danish AML Act (an AMLD5 equivalent) to Greenland via Royal Decree in late 2021.
* Greenland is not part of the EU, so EU financial directives (like MiCA) do not apply automatically. Any future adoption would require specific extension via Danish Royal Decree.

Full Analysis Report

The regulatory status of cryptocurrency in Greenland is 'Allowed-Regulated', mirroring the framework of Denmark but implemented through specific Royal Decrees. As an autonomous territory within the Kingdom of Denmark, Greenland adopts Danish financial legislation after a formal enactment process. The pivotal regulatory shift occurred with Royal Decree No. 2627 on December 29, 2021, which extended the definition of 'obliged entities' in the Anti-Money Laundering Act (Hvidvaskloven) to include virtual currency exchange providers and custodian wallet providers in Greenland. This effectively brought the local crypto sector under the supervision of the Danish Financial Supervisory Authority (Finanstilsynet).

Under this regime, any entity providing crypto-to-fiat exchange or wallet services in Greenland must register with Finanstilsynet. They are required to perform Know Your Customer (KYC) checks, monitor transactions for suspicious activity, and report to the Money Laundering Secretariat (Hvidvasksekretariatet). While there are few, if any, indigenous Greenlandic crypto exchanges due to the small population (approx. 56,000), the legal requirement for registration is in force. This creates a clear legal environment where trading is permitted but intermediaries are strictly regulated for financial crime compliance.

From a taxation perspective, the Greenland Tax Agency (Skat) treats cryptocurrency trading as speculation. Unlike some jurisdictions that apply a lower capital gains tax rate, Greenland includes crypto profits in personal income, which is subject to high marginal tax rates. Taxpayers must report gains annually. The deductibility of losses is permitted but can be complex, often requiring a clear link to the speculative intent of the original purchase. The tax authorities have the power to request transaction data to ensure compliance.

Practically, Greenlandic residents typically use Danish or international platforms. Since the Danish banking infrastructure underpins Greenland's financial system, residents face the same operational challenges as Danes, where major banks may block transfers to crypto exchanges due to their own risk assessments. Despite these banking hurdles, the activity itself remains legal and regulated, distinguishing Greenland from 'Gray-Zone' jurisdictions where the legal status is ambiguous.

The regulatory status of cryptocurrency in Greenland is 'Allowed-Regulated', mirroring the framework of Denmark but implemented through specific Royal Decrees. As an autonomous territory within the Kingdom of Denmark, Greenland adopts Danish financial legislation after a formal enactment process. The pivotal regulatory shift occurred with Royal Decree No. 2627 on December 29, 2021, which extended the definition of 'obliged entities' in the Anti-Money Laundering Act (Hvidvaskloven) to include virtual currency exchange providers and custodian wallet providers in Greenland. This effectively brought the local crypto sector under the supervision of the Danish Financial Supervisory Authority (Finanstilsynet).

Under this regime, any entity providing crypto-to-fiat exchange or wallet services in Greenland must register with Finanstilsynet. They are required to perform Know Your Customer (KYC) checks, monitor transactions for suspicious activity, and report to the Money Laundering Secretariat (Hvidvasksekretariatet). While there are few, if any, indigenous Greenlandic crypto exchanges due to the small population (approx. 56,000), the legal requirement for registration is in force. This creates a clear legal environment where trading is permitted but intermediaries are strictly regulated for financial crime compliance.

From a taxation perspective, the Greenland Tax Agency (Skat) treats cryptocurrency trading as speculation. Unlike some jurisdictions that apply a lower capital gains tax rate, Greenland includes crypto profits in personal income, which is subject to high marginal tax rates. Taxpayers must report gains annually. The deductibility of losses is permitted but can be complex, often requiring a clear link to the speculative intent of the original purchase. The tax authorities have the power to request transaction data to ensure compliance.

Practically, Greenlandic residents typically use Danish or international platforms. Since the Danish banking infrastructure underpins Greenland's financial system, residents face the same operational challenges as Danes, where major banks may block transfers to crypto exchanges due to their own risk assessments. Despite these banking hurdles, the activity itself remains legal and regulated, distinguishing Greenland from 'Gray-Zone' jurisdictions where the legal status is ambiguous.

Source Evidence

Primary and secondary sources cited in this analysis

Decree on entry into force for Greenland of the AML Act (No. 2627) primary (official_government)

2021-12-29

"§ 1, nr. 23) Udbydere af veksling mellem virtuelle valutaer og fiatvalutaer. 24) Udbydere af virtuelle tegnebøger."

Greenland Tax Agency - Bitcoin and Virtual Currencies primary (official_government)

2023-01-01

"Financial transactions made with Bitcoin or other cryptocurrencies... will be considered as if made in a currency recognized by the national bank."

Danish FSA - Anti-Money Laundering Act primary (regulator)

2024-06-17

"The Act applies to... providers of exchange between virtual currencies and fiat currencies."

Thomson Reuters - Cryptocurrency Regulations by Country secondary (analysis)

2022-04-01

"As an autonomous Danish dependent territory under the Kingdom of Denmark, financial services, banking, and crypto laws and regulations in Greenland are within the scope of the Danish regime."

Web Sources (7)

Sources discovered via web search grounding

Search queries used (9)

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