Initial Coin Offerings
Bitcoin and Ether are not regulated under Austrian law. The Austrian Financial Market Authority (Finanzmarktaufsicht – FMA) has issued several warnings on cryptocurrencies and their volatility. Depending on the business model, anti-money laundering (AML ) obligations under the Austrian Trade Code (Gewerbeordnung – GewO) may apply. The AML under the financial services legislation does not yet apply to professional cryptocurrency traders.
Cryptocurrencies like Bitcoin and Ether are not yet regulated in Bulgaria.
The Bulgarian National Bank (“BNB”) and the Financial Supervision Commission (“FSC”) have given formal opinions on the regulatory treatment of cryptocurrencies as part of court proceedings. According to the BNB, Bitcoin is not legal tender in Bulgaria and bitcoins are not “funds” or electronic money within the meaning of the Bulgarian Act on Payment Services and Payment Systems (“APS”). The FSC, which is the authority that regulates trading in financial institutions, states that bitcoins and similar cryptocurrencies are not regarded as financial instruments and do not fall within the scope of the Bulgarian Market in the Financial Instruments Act (“MFIA”) (implementing MiFID). The FSC outlines, however, that in cases where cryptocurrencies are underlying assets of derivatives, trading in such derivatives is an activity subject to licensing as an investment activity. The court practice, which is not very extensive on the matter, supports the conclusions of the BNB and the FSC. The Bulgarian Tax Authority, on the other hand, stated in a formal opinion issued in 2014 that the income received by selling and exchanging bitcoins should be declared and taxed. The taxable basis will be the accumulated profit from the sale and exchange of cryptocurrencies throughout the taxable year less the price for which the cryptocurrency was purchased by the taxable person/entity. Apart from these formal opinions given in 2014, there is no recent official position or statement by the Bulgarian authorities which would be competent in case of the regulation of cryptocurrencies in the future. In a recent informal statement on cryptocurrencies in December 2017, the BNB governor said that Bitcoin and other cryptocurrencies are not money or digital currency (e-money) which will be issued by banks in the future. Cryptocurrencies are speculative assets, which is why they remain unregulated.
Cryptocurrencies like Bitcoin and Ether are not yet regulated in Croatia. According to the Croatian National Bank (“CNB”), Bitcoin and Ether neither fall within any regulated category of means of payment nor constitute money or electronic money. Transactions involving Bitcoin or Ether should not constitute a payment service under the Croatian Payment Transactions Act. Accordingly, the CNB does not issue a licence to businesses issuing or trading in virtual currencies nor does it have a legal basis for their supervision. The Croatian Tax Authority, on the other hand, has stated that Bitcoin is equivalent to a money-market instrument and thus capital gains tax is applicable. This conclusion may be attributed to the Tax Authority’s desire to forcefully subsume Bitcoin under one of the expressly stipulated types of financial assets in order to be able to levy tax; thus it is questionable whether this opinion should be used for future interpretations of the legal status of Bitcoin or any other token. Except for a couple of opinions/statements of the CNB and the Tax Authority, no particular guidelines are available. Nevertheless, the CNB announced that it will closely follow EU regulations. Therefore, in view of the ECJ’s judgment in case C-264/14, Bitcoin should not be considered as tangible property, as a security conferring a property right or as a security of a comparable nature, and the same should apply to Ether. Finally, the CNB recently formed an internal taskforce to deal with FinTech, and therefore further actions/opinions/statements may be expected.
Cryptocurrencies are unregulated in Hungary and not considered as a form of money. No guidance is yet available as to the regulatory treatment of cryptocurrencies, but the Hungarian National Bank is investigating the topic. The regulators have issued warnings with respect to the potential risks.
Cryptocurrencies are unregulated in Poland.
The National Bank of Poland (the “NBP”) and the Polish Financial Supervision Authority (the “PFSA”) issued a joint release on 7 July 2017 indicating the unregulated legal status of cryptocurrencies. The NBP also added that cryptocurrencies are not a form of electronic money (within the meaning of the legislation implementing Directive 2009/110/EC on the taking up, pursuit and prudential supervision of the business of electronic money institutions) and not a valid payment instrument. The NBP advised caution with respect to investment in cryptocurrency due to potential risks for investors and the financial system.
The PFSA issued an additional release on 22 November 2017 confirming the unregulated legal status of cryptocurrencies and issued a warning with respect to ICOs due to the lack of supervision and potential breach of financial instruments / investment activity regulations, although according to the PFSA, this needs to be evaluated on a case-by-case basis.
The buying, storing and trading of virtual currencies is still largely unregulated in Slovenia.
Pursuant to some of the most recent guidelines and statements by the Slovenian Tax Authority (FURS) and the Bank of Slovenia (issued in January 2018), cryptocurrencies should not be considered monetary assets (denarno sredstvo) or financial instruments; nor are they electronic money, due to their own denomination. They can, however, legally be used as payment instruments.
To date, FURS has issued several guidelines on the tax treatment of virtual currencies. As a general rule, any income (irrespective of its form) is taxed pursuant to standard income tax provisions; however, capital gains from trading cryptocurrencies are not subject to income tax, unless such income is generated within a business activity. Proceeds derived via the “mining” of cryptocurrencies are taxed as any other income under the category of other income (drugi dohodek), using the BTC/EUR exchange rate at the time when the income is received. As for VAT, if the issued tokens are specifically designated for the purchase of particular products/services or have the characteristics of financial instruments, the issuance of tokens is subject to VAT. The guidelines also address certain other VAT aspects linked to the purchase of software and hardware for mining and to managing of trading platforms.
In addition, the Slovenian Office for Money Laundering Prevention has issued a formal statement that the AML regime should in principle fully apply to the issuance and management of virtual currencies.
Otherwise the topic of cryptocurrency has received a lot of attention in Slovenia and regulation (and regulatory priorities) in this respect is regularly discussed.