First, lets shed some light on some basic questions.
Ireland is fast becoming a leading country in Europe for crypto start up companies. There has been a large amount of development and adoption of new businesses and startups in the blockchain , fintech and cryptocurrency sector.
The digital assets landscape is ever-shifting and start ups should always consult an experienced law firm prior to setting up a crypto business in Ireland to ensure compliance.
• Supporting crypto-related activities
Are digital currencies and related activities approved in the jurisdiction?
While Ireland’s Central Bank has been vocal in warning investors on the risks of crypto assets, it has not prohibited or banned crypto-related activities. It means crypto businesses and consumers are free to transact.
Taxation is one of the most challenging aspects of global crypto regulations. The fact that cryptocurrencies can be used both as a medium of exchange and a store of value means they can be subject to double taxation or no taxation.
A 2018 publication by the Irish Revenue confirmed that crypto transactions are subject to tax treatment based on the parties involved and the nature of the activities. The nature and level of activity within the transaction will determine whether the dealing is considered a trade of dealing or a capital transaction to charge capital gains.
• Regulation - crypto regulations provisions in Ireland
The Central bank has taken steps to regulate digital asset providers by introducing the VASP registration requirement for businesses trading in digital assets.See our article on VASP registration for further information.
A start up cannot trade in Ireland without first obtaining registration for VASP.
Other authorisations may be required by a crypto business depending on its nature such as the requirement to hold an e-money licence or to register under MiFID.
• What future regulations are likely for a crypto business in Ireland?
As a gateway into Europe , Ireland has always been seen as a great place to do business for large mulitnationals and now of late, start up crypto related businesses.
However, the changing crypto landscape means new regulations are always coming up and are certainly on the horizon in Europe although there is no timeframe as to when this may happen. The European Commission’s Digital Finance Package on 24 September 2020 included a Proposal for a Regulation of the European Parliament and of the Council on Markets in Crypto-assets and amending Directive (EU) 2019/1937 (Proposal) which would create a regulatory framework for crypto-assets.
This legislation is currently at proposal level and so it may be a number of years before the framework becomes law.
• Are you ready to open a crypto business in Ireland?
The best way to ensure your crypto business's proper launch and optimum operations are to engage a professional and experience crypto law firm.
A legal opinion from your law firm will set out each authorisation or regulation that applies so that you are compliant from the start.
Your lawyer will also keep abreast of all legal provisions and any future changes.
Contact us today for a seamless crypto business set up in Ireland.