Guide to Cryptocurrency Regulation in the Czech Republic

Crypto license in Czech is affected by the AML Regulation where the Fifth Money Laundering Directive (5MLD) is integrated into Czech law, specifically via an amendment to Act No. 253/2008 Coll. This legal adjustment involves those offering virtual asset services.

Financial services in the Czech Republic are primarily governed by two critical acts: the Payment Services Act (Act No. 370/2017 Coll.) and the Capital Markets Act (Act No. 256/2004 Coll.). The Czech National Bank (CNB) mainly handles authorization and enforcement of these financial services regulations. Currently, there are no specific regulations for crypto assets in the financial services sector.

Regulation Status: Exchange, Custody, Borrowing/Lending, and Yield/Staking in Czech Republic

AML Regulation

The Czech AML Act is pivotal for cryptoassets, addressing anti-money laundering (AML) and counter-terrorism financing (CTF). All virtual asset service providers, deemed AML obliged entities, must adhere to identification, due diligence, and reporting rules, with no known providers holding financial licenses besides general trade ones.

Financial Services Regulation

According to the Czech National Bank (CNB), licenses aren’t necessary for trading or custody services of cryptocurrencies, unless offering consumer lending services or continuous, profit-based virtual asset services which mandate a general trade license. While mining and validating transactions are license-free, some services may require MiFID 2 or AIFM licenses. The regulatory status of stablecoins, potentially classified as e-money under EU Directive EMD2, remains unclear.

Timeframe for Czech Crypto Business & License Setup

Financial Services Regulation

Securing a basic trade license is straightforward, typically processed within five business days upon submitting necessary corporate documents. However, obtaining other financial licenses, like consumer credit, payment institution/EMI, MiFID II, or AIFM, can range between 6 to 18 months.

Financial License Acquisition Highlights:

• Simple trade license: ~5 business days.
• Other financial licenses: 6-18 months.

AML Regulation

Virtual asset service providers aren’t required to acquire licenses under AML regulations but must adhere to Czech AML rules for services provided within the nation.

AML Compliance Quick Points:

• No AML license needed.
• Must follow Czech AML rules.

Estimated Total Cost for License Acquisition

Acquiring a trade license typically ranges from EUR 2,000-3,000, primarily for procuring and translating necessary corporate documents. This estimate excludes the expenses related to forming a branch or subsidiary, which could amount up to EUR 10,000. If obtaining financial licenses like consumer credit, payment institution/EMI, MiFID II, or AIFM is essential, expect significantly higher costs.

Expense Highlights:

• Trade License: EUR 2,000-3,000.
• Branch/Subsidiary Establishment: Up to EUR 10,000.
• Financial Licenses (if needed). Substantially higher cost.

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