Payments and infrastructure

FAQs about crypto-assets

    For consumers thinking of purchasing crypto-assets

  • What are cryptoassets?

    A cryptoasset is a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology. Different terms have been used for cryptoassets in the past, including crypto holdings, virtual currencies, crypto currencies and digital currencies. The term “virtual currency” is used for cryptoassets in legislation in the area of AML/CFT.

  • Are entities that provide for the issuance, purchase, storage and trading of cryptocurrencies systemically regulated and supervised?

    The Markets in Crypto-Assets Regulation (MiCAR) was published in the Official Journal of the European Union on 9 June 2023, and standardises the requirements for:

    • the issuance, offer to the public and admission to trading on a trading platform of asset-referenced tokens, e-money tokens, and cryptoassets that are neither asset-referenced tokens nor e-money tokens, and
    • cryptoasset service providers (e.g. providers of exchange of cryptoassets for funds).

     

    The provisions of the MiCAR on the conditions for issuing asset-referenced tokens and e-money tokens have been applied as of 30 June 2024, while the remaining provisions will begin to be applied on 30 December 2024. 

    The implementation of the MiCAR in Slovenian law is governed by the Act Implementing the Regulation (EU) on Markets in Crypto-Assets (Official Gazette of the Republic of Slovenia, No. 95/2024), which designates the competent authorities for the granting and withdrawal of authorisations and for the supervision of cryptoasset service providers and issuers of cryptoassets, and also sets out misdemeanours provisions. The law allocates the relevant powers between the Securities Market Agency and Banka Slovenije (see more in section For potential cryptoasset service providers).

    The area of cryptoassets is also regulated from the perspective of AML/CFT (see more in section For potential cryptoasset service providers).

  • What should consumers be aware of in connection with the Market in Crypto-Assets Regulation?

    Consumers who are thinking of purchasing cryptoassets that are supposed to maintain a stable value, i.e. e-money tokens (which aim to maintain a stable value in relation to an official currency) and asset-referenced tokens (which aim to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies), should check whether the cryptoassets are issued by an authorised issuer. This should be clear from the disclosures in the cryptoasset white paper, on the website of the issuer, the offeror or the person seeking admission to trading, and on the website of the European Securities and Markets Authority (ESMA).

    Certain cryptoassets and services are only partly regulated by the MiCAR, or are fully exempted. For example, bitcoin is merely regulated indirectly via cryptoasset service providers, while certain cryptoassets, e.g. fully decentralised cryptoassets, do not fall under the scope of the MiCAR. The MiCAR also does not regulate service providers from third countries.

    Consumers should be particularly cautious with regard to activities not regulated by the MiCAR, as in this case they remain exposed to all the risks inherent in cryptoassets. Examples of such situations are:

    • an issuer of e-money tokens is not authorised as a credit institution or an electronic money institution;
    • an issuer of asset-referenced tokens has not obtained an authorisation under the MiCAR, and is not a credit institution;
    • an entity who is not an issuer of asset-referenced tokens or e-money tokens failed to obtain advance written consent from the issuer for their offer to the public or admission to trading.

     

    Consumers should likewise check whether relevant entry into register has been obtained for other cryptoassets, and whether an authorisation has been obtained under the MiCAR in connection with cryptoasset service providers. The services referred to are:

    • providing custody and administration of cryptoassets on behalf of clients;
    • operating a trading platform for cryptoassets;
    • exchanging cryptoassets for funds;
    • exchanging cryptoassets for other cryptoassets;
    • executing orders for cryptoassets on behalf of clients;
    • placing cryptoassets;
    • receiving and transmitting orders for cryptoassets on behalf of clients;
    • providing advice on cryptoassets;
    • providing portfolio management for cryptoassets; and
    • providing transfer services for cryptoassets on behalf of clients.

     

    The EBA released a statement on 5 July 2024 warning issuers and service providers of e-money tokens and asset-referenced tokens that they are required to comply with the provisions of Titles III and IV of the MiCAR as of 30 June 2024. The EBA also warns consumers that before purchasing they should check whether the e-money tokens and asset-referenced tokens were issued in accordance with the MiCAR, as otherwise they have no recourse to it.

    Any complaints by clients and other stakeholders, including consumer associations, in connection with alleged breaches of the MiCAR by providers of e-money tokens, persons seeking the admission to trading of e-money tokens, issuers of e-money tokens, or electronic money institutions when providing custody and administration of cryptoassets on behalf of clients and providing transfer services for cryptoassets on behalf of clients in connection with e-money tokens that they issue may be filed on the Banka Slovenije website (complaints and whistleblowing).

  • What should I be particularly careful of when deciding to purchase cryptoassets and related products?

    Before purchasing cryptoassets, particularly those not regulated by the MiCAR, you should ask yourself the following questions:

    • Are these cryptoassets and services regulated by the Market in Crypto-Assets Regulation?
    • Can I afford to lose all the money I invest?
    • Am I ready to take up high risks to earn the advertised returns?
    • Do I understand the features of cryptoassets or related products and services?
    • Is the firm/party I am dealing with regulated, where are they established, and who supervises them? 
    • Has the firm/party I am dealing with been blacklisted by the relevant national authorities (although not being blacklisted is no guarantee that a firm/party is safe to deal with)?
    • Am I able to effectively protect the devices I use for buying, storing or transferring cryptoassets, including my private keys?
    • What are the fees (commission) I will pay to (i) acquire the cryptoassets and (ii) transfer/sell these units?
    • In which country is the entity with whom I am entering into a contract established, and what is the legislation there (tax arrangements, AML/CFT, etc.)?
    • What/who guarantees that I will be able to convert my units of cryptoassets back into fiat currency (euro, US dollar, etc.), and how? How quickly can I convert cryptoassets into fiat currency?
    • What benefits do I gain by investing? Does the particular cryptoasset scheme even allow for conversion back into fiat currency?
    • What legal recourse do I have if I fall victim to scams or fraud, and will anyone return my money to me in this event?
    • What is the tax treatment of cryptoassets and of trading in them? What are the resulting tax liabilities? Answers to this question can also be found in the clarifications by the FARS (in Slovene).

     

    We suggest that anyone who lacks the information to be able to answer the above questions to reconsider whether a purchase of this type is sensible. Even if you are well-informed and you opt for such a purchase, it is recommended that the amount that you invest should not constitute an excessive exposure, and you should be aware that it might be lost.

    Holders of cryptoassets who want to use them for making payments are advised to first check whether any fees or commission have to be paid to do so.

  • What are the risks associated with cryptoassets?

    Consumers need to be particularly vigilant because certain cryptoassets and services are only partly covered by the MiCAR, while others do not fall under its scope at all, in which case they remain exposed to all the risks inherent in cryptoassets. For example, bitcoin is merely regulated indirectly via cryptoasset service providers, while certain cryptoassets, e.g. fully decentralised cryptoassets, do not fall under the scope of the MiCAR. The MiCAR also does not regulate service providers from third countries.

    The key risks inherent in cryptoassets and related products highlighted by financial supervisors in the EU include:

    • you might lose the entire amount invested;
    • prices can rise or fall (even to nothing) very quickly;
    • you may fall victim to scams, fraud, operational errors or cyberattacks;
    • if you use cryptoassets as a means of payment, you are not protected as in the case of a transfer from a payment (transaction) account;
    • if something goes wrong, you are unlikely to have any rights to protection or compensation.

     

    Given the general interest in cryptoassets, Banka Slovenije is making consumers aware of these warnings with regard to cryptoassets, while the risks inherent in cryptoassets were also warned about by Slovenia’s Financial Stability Board, which is chaired by Banka Slovenije.

    Regular warnings on the risks posed to consumers by cryptoassets are also issued by EU financial supervisors, namely the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA), and the European Insurance and Occupational Pensions Authority (EIOPA) (for more, see Useful links below).

  • Useful links

    Further information about cryptoassets can be found on Banka Slovenije’s Fintech Innovation Hub.

    Cryptoassets are also addressed by other institutions. Some important links:

     

    Statements by EU financial supervisors (selection):

    • The EBA released a statement on 5 July 2024 warning issuers and service providers of e-money tokens and asset-referenced tokens that when issuing cryptoassets of this kind they are required to comply with the provisions of Titles III and IV of the MiCAR as of 30 June 2024. The EBA also warns consumers that before purchasing they should check whether the e-money tokens and asset-referenced tokens were issued in accordance with the MiCAR, as otherwise they have no recourse to it.
    • The EBA released another statement on 5 July 2024 aimed at persons issuing e-money tokens and asset-referenced tokens, offering them to the public or seeking their admission to trading, and at consumers. It sets out the priorities for EU supervisors with regard to issuers of e-money tokens and asset-referenced tokens, which will be implemented in 2024 and 2025.

     

    Legislation:

    A list of relevant legislation can be found in the Regulation tab.

    For potential providers of services in connection with crypto-assets

  • How are powers under the MiCAR allocated between the Securities Market Agency and Banka Slovenije?

    The MiCAR stipulates that Member States should designate the competent authorities responsible for carrying out the functions and duties under the regulation, and should determine their respective tasks when more than one competent authority has been designated by a Member State. The implementation of the MiCAR is governed by the Act Implementing the Regulation (EU) on Markets in Crypto-Assets (Official Gazette of the Republic of Slovenia, No. 95/2024). It designates the competent authorities (the Securities Market Agency and Banka Slovenije) for the granting and withdrawal of authorisations, the approval of the cryptoasset white paper and approval of changes to the cryptoasset white paper, and the receipt of notification of the cryptoasset white paper and changes to the cryptoasset white paper, and for the supervision of cryptoasset service providers and issuers of tokens, and regulates the aforementioned competent authorities’ cooperation with the EBA and the ESMA, and the size of the fines for breaches of the MiCAR and the Act Implementing the Regulation (EU) on Markets in Crypto-Assets.

    Under the Act Implementing the Regulation (EU) on Markets in Crypto-Assets, Banka Slovenije is the competent authority for receiving notification of the cryptoasset white paper from persons offering e-money tokens to the public or seeking their admission to trading, i.e. credit institutions and electronic money institutions, and also for receiving notification from electronic money institutions who intend to provide custody and administration of cryptoassets on behalf of clients and transfer services for cryptoassets on behalf of clients in connection with e-money tokens that they issue. Banka Slovenije is also the competent authority for the supervision of persons who hold an authorisation to offer e-money tokens to the public or to admit them to trading, and conducts supervision of electronic money institutions when they provide custody and administration of cryptoassets on behalf of clients and transfer services for cryptoassets on behalf of clients in connection with e-money tokens that they issue.

    At the same time, Banka Slovenije cooperates with the Securities Market Agency in supervising entities that the latter supervises in collaboration with Banka Slovenije concerning the provision of investment services and activities (under the law governing the market in financial instruments). Cooperation of this kind relates to credit institutions when acting as issuers of asset-referenced tokens or when offering asset-referenced tokens to the public or seeking their admission to trading, and when providing cryptoasset services in accordance with the MiCAR.

  • Do we need to register with Banka Slovenije if we provide “virtual currency services” as defined by the Prevention of Money Laundering and Terrorist Financing Act?

    Legal and natural persons who in the pursuit of their business activities or profession provide virtual currency services (the term used by the ZPPDFT-2 for cryptoassets) or other transactions included under these services (e.g. exchange between fiat currencies and virtual currencies, custody or administration of virtual currencies, services in connection with the issuance of virtual currencies) are also classified by the Prevention of Money Laundering and Terrorist Financing Act (ZPPDFT-2) as obliged entities who are required to take the prescribed measures to prevent money laundering and terrorist financing. Under the ZPPDFT-2, providers of virtual currency services who are established in Slovenia or who have a branch in Slovenia are additionally required to register with the Office for Money Laundering Prevention before commencing the provision of virtual currency services.

    Further information and resources in connection with registration: