The signing in recent days of the so-called OAM Decree by the MEF (however, not yet published) has created a certain turmoil in the world of cryptocurrencies in Italy. Let’s try to understand what this measure consists of and what it entails on a practical level.
The OAM decree concerning cryptocurrency activities
The Decree has had a long gestation and is supposed to implement the legislative regulation on anti-money laundering, which in turn intended to transpose EU Directives 2015/849 and 2018/843.
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The heart of this Decree lies in the fact that to be able to exercise the activities of a cryptocurrency exchange in Italy, it is required, first of all, to be enrolled in a special register kept by the OAM (Organismo degli Agenti e Mediatori creditizi), in a mirror way to what is provided for the so-called moneychangers. Secondly, the operators are required to transmit periodically and regularly to the OAM all the data of the operations and the identification data of the platform users who have carried them out. The data thus collected can then be accessed by the GdF (Guardia di Finanza) and other law enforcement agencies to exercise their investigative and police functions.
However, the apparatus that emerges from the combination of European and national legislative provisions and the ministerial Decree presents a series of critical points.
The first point is that, according to the approved ministerial Decree, the number of subjects that would seem to be required to register in this special section of the register ends up embracing a vast range of operators, well beyond those who carry out activities related to those of cryptocurrencies exchange and especially those indicated by the European directives.
Art. 1 paragraph 2 letter b of the Decree, in fact, defines that it is required to apply the regulations, any subject that professionally provides:
“Services functional to the use, exchange, storage of virtual currency and their conversion from or into currencies having legal tender or digital representations of value, including those convertible into other virtual currencies as well as the services of issuing, offering, transferring and clearing and any other service functional to the acquisition, negotiation or intermediation in the exchange of the same currencies.”
Now, the use of the expression “functional services” for the use, exchange, storage, etc., of virtual currencies, and the phrase “any other service functional to the acquisition, negotiation or intermediation in the exchange of the same currencies” in fact seems to include a range of activities that with the activity of exchange commonly known, may have little to do.
That poses a first practical problem, since those subjects that do not carry out the activity of cryptocurrency exchange in the strict sense, but some kind of service that could be qualified as “functional,” find themselves exposed to the obligation of registering in the OAM and of periodic transmission of all data, under penalty of preclusion of the provision of services on the national territory.
For example, in abstract terms, a firm that rents out equipment that can act as a POS to foreign exchange operators could be included among those providing functional services to exchange virtual currencies. The same could be said of a lawyer or accountant who is asked for legal or tax advice on a transaction involving the exchange of virtual currencies: therefore, a “functional” service to that type of activity. And if you want to give vent to your imagination, you can find many activities that, even if they have almost nothing to do with the mediation or exchange of currencies (virtual or not), can fall into the whirlpool of activities that in some way are “functional,” as the rules say.
In addition, the national legislation includes operations of exchange from virtual currencies to legal tender currencies (i.e., at the legal rate) or vice versa, and the exchange of virtual currencies with other virtual currencies (of which the directives do not speak at all).
Criticalities of the regulation
Now, it is quite evident that it is unthinkable that a professional (lawyer or accountant) who offers consultancy or a company that rents technological equipment to an exchange or to a company that offers digital portfolio services, to carry out this type of activity should be registered in the register kept by the OAM because it is evident that this type of subject in practice has nothing that could assimilate it to an exchange of virtual currencies.
However, apart from this blatant unreasonableness, the issue is that the rules of domestic law (both those contained in Legislative Decree 90/2017, as well as those contained in Legislative Decree 125/2019) where disproportionately expand the perimeter of the activities subject to this type of fulfillment, appear to be blatantly contrary to the letter and spirit of the European anti-money laundering directives.
Both directives, in fact, where they impose on the Member States to extend the obligations of registration in the appropriate registers and periodic reporting of transactions to be borne by moneychangers also to cryptocurrency exchanges, refer explicitly and surgically only to “service providers whose activity consists in the provision of exchange services between virtual currencies and currencies having legal tender” and to “providers of digital portfolio services.”
Thus, there is no reference in the European rules to services indirectly or potentially related to foreign exchange or digital wallet services. Not to mention the fact that the European rules refer exclusively to exchange services between virtual and hard currencies, while there is no mention at all of the exchange services from virtual currencies to other virtual currencies (which are expressly included in the Italian rules).
And here, another problem arises concerning the limits derived from the delegated law (L. 170/2016) that authorized the government to adopt legislative decrees for the transposition of EU directives. The delegation, as articulated, contained a slavish reference to the European directives on the subject of anti-money laundering, without specific indications regarding the possibility of an expansion, in particular of the range of subjects or activities identified by the European sources.
A regulatory mess
Now, this mess, first of all, exposes the ministerial Decree to a risk of direct challenge before the TAR (Tribunale Amministrativo Regionale) for the part and to the extent that it imposes obligations that affect in a significantly detrimental and restrictive way the sphere of freedom of economic enterprise of Italian and foreign operators, forced to fulfill obligations not provided for by European legislation.
Secondly, it also exposes the risk of a declaration of unconstitutionality of the legislative decrees 90/2017 and 125/2019, transposing the European legislation for excess of delegated powers.
In short, the national legislator and regulator have “expanded” a little too much, which could generate unpleasant consequences.
And meanwhile, rumors of actions and appeals are already circulating in the environment.