Portugal Approves New Regulations to Combat Illicit Activities with Crypto Assets
The Portuguese Parliament has approved new legislation aimed at preventing illicit activities involving crypto assets. The law, set to take effect on July 1, 2026, aligns national regulations with European Union directives to combat money laundering and terrorist financing.
Key Provisions of the Legislation
The new law introduces several critical measures:
- Regulatory Oversight: Crypto asset service providers based in Portugal will now be classified as financial entities. This designation subjects them to supervision by the Bank of Portugal, ensuring compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
- Due Diligence Requirements: These providers are mandated to implement stringent customer due diligence procedures. This includes verifying the identities of clients and monitoring transactions for suspicious activities.
- Risk Assessment: In cases where a high risk of money laundering is identified, entities must thoroughly understand the entire transaction chain and all parties involved. This measure aims to prevent unauthorized entities from processing crypto asset transactions.
Legislative Process and Political Support
The legislation received unanimous approval in the Committee on Budget, Finance, and Public Administration, with support from major political parties, including the Social Democratic Party (PSD), Socialist Party (PS), Chega, and the People's Party (CDS-PP). The law is scheduled for final global voting and, upon approval, will be promulgated by the President of the Republic.
Alignment with European Union Directives
This legislative move transposes EU Regulation 2023/1113 into Portuguese law, reinforcing the country's commitment to adhering to European standards in financial regulation. By integrating these directives, Portugal aims to enhance the integrity and security of its financial system, particularly concerning emerging technologies like crypto assets.
Implications for Crypto Asset Service Providers
Service providers in the crypto asset sector must adapt to these new regulatory requirements. Compliance will involve implementing robust AML and CTF measures, conducting comprehensive risk assessments, and ensuring transparent operations. Failure to comply may result in penalties and could impact the ability to operate within the Portuguese market.
Conclusion
The approval of this legislation marks a significant step in Portugal's efforts to regulate the rapidly evolving crypto asset market. By aligning with EU directives and enhancing oversight, the country aims to prevent illicit activities and promote a secure and transparent financial environment.
