Crypto and Blockchain Multi-Jurisdictional Analysis — Part 3: Luxembourg
By INGVARR on ALTCOIN MAGAZINE
Overview of the regulatory regime for cryptoassets in Luxembourg
Luxembourg has a long-standing tradition as a financial and business centre. It is a hub for international trade in the financial sector, as well as in the industrial and commercial sectors. As an EU member state, Luxembourg is required to comply with all EU directives and regulations.
The two principal pillars of Luxembourg’s financial services sector are private banking and fund administration. With approximately 140 highly experienced banking institutions, a successful investment fund industry, a dynamic insurance sector, skilled workers and specialised companies, Luxembourg has the full range of diversified and innovative financial services to offer to large and medium-sized companies.
There is no special legal framework for cryptocurrency in Luxembourg. In its regulation of cryptocurrency and initial coin offerings (ICOs), Luxembourg generally relies on the positions of the European Securities and Markets Authority.
In March 2018, the Commission de Surveillance du Secteur Financier (“CSSF”) warned investors against the dangers of cryptocurrencies and ICOs[1]. It stated that virtual currencies are not backed by a central bank and their value is not guaranteed, investors have no protection, and the cryptocurrency platforms are often vulnerable to being hacked, so the risk of theft is high. As per ICOs, CSSF noted that the ICO model lacks verifiable information about the tokens created and the money collected, and urged investors to exercise caution and to run a series of checks on ICO providers to ensure they are legitimate businesses, including checking the Registre de Commerce et des Sociétés de Luxembourg.
Despite this warning from its main financial services regulator, Luxembourg appears to see the development of cryptocurrencies in a positive light. In June 2017, the Luxembourg Minister of Finance, Pierre Gramegna, recognised before Parliament that cryptocurrencies are actual currencies, as “they are accepted as a means of payment for goods and services by a sufficiently large circle of people.”[2] He also stated that there was no regulation “from a monetary perspective” regarding cryptocurrencies, but that cryptocurrency dealers in Luxembourg are bound by the same rules as any other financial service providers with regards to the fight against money laundering and the financing of terrorism.
[1] CSSF, Avertissement sur les monnaies virtuelles [Warning About Cryptocurrencies] (Mar. 14, 2018), click here to read the full document.
[2] L’État garde un œil sur la monnaie virtuelle [The Government Keeps an Eye on Cryptocurrencies], L’Essentiel (June 26, 2017), open link.
_____________________________________________________________
INGVARR is a team of experts combining in-depth market knowledge, experience at international law firms and the insight gained working in-house for leading corporations. We provide an innovative and savvy legal and tax counsel on worldwide acquisitions and sales, joint ventures, corporate structuring, financing and business operations. We can take care of all transactional and regulatory work as well as handle any day-to-day matters, operating as your in-house legal department. For more information on INGVARR please visit http://ingvarr.com/
Before moving on, make sure to press follow, leave a clap or 46, share today’s highlight and if you missed the last article, click here.
Read about the Altcoin Magazine Mastermind Event here.
Follow us on Twitter, InvestFeed, Facebook, Instagram, LinkedIn, and join our Discord and Telegram.
The purpose of ALTCOIN MAGAZINE is to educate the world on crypto and to bring it to the hands and the minds of the masses.
