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What are virtual currencies from an Italian legal point of view? The Bank of Italy intervened twice in this area, the first in January 2015 (1) and again in March 2018, (2) adopting a similar approach to the Commodity of Commodity Futures Commodities in the Member States. US. In 2017, the Parliament amended Legislative Decree 231/2007 with the Legislative Decree 90/2017 (as amended, the Money Laundering Act). (3)
The legislator defined the "virtual currency" as follows:
A digital representation of the value that is neither issued by a central bank or a public authority, nor attached to a legal tender that can be used as a medium for the purchase of goods and services and transferred, stored and exchanged electronically . (4)
In 2015 the Bank of Italy used similar terms in its definition of virtual currencies as "a digital representation of the value that functions as a medium of exchange or for investment purposes, units of account and / or a store of value ". The Bank of Italy explained that the term "virtual currency" is used exclusively to identify a social phenomenon known by that name. Although in some cases virtual currencies are convertible into legal currencies (eg Euro and US dollars), virtual currencies do not have legal tender status. (5)
The fact that virtual currencies are not legal tender means that their acceptance by creditors to meet their monetary obligations is not required by law. (6) In other words, debtors have the right to use virtual currencies to meet monetary obligations only insofar as this means of payment is expressly provided for in the contract by mutual consent of the parties or if the creditor accepts it.
Although virtual currencies are not considered legal tender in Italy, they can still be considered a means of payment. This is confirmed both by the Bank of Italy and by the statutory provisions. (7)
Virtual currencies as a means of payment
Virtual currencies are already used and accepted on the Italian market for payment purposes in connection with many daily activities. For example, the cooperative that operates one of the largest taxi services in Rome accepts bitcoin payments. The cooperative's drivers:
- use the same POS devices generally used for credit card transactions,
- charges for the service in euros (for the amount displayed on the counter); and
- receive payment in euros, but customers pay through their bitcoin wallet.
Other examples include:
- a pharmacy in Trieste;
- 17 small towns in Trentino that accept bitcoin to pay for school cafeteria services;
- shops in Rovereto; and
- a construction company that sells apartments in Rome through bitcoin payments
Virtual currencies for investment purposes
Various projects that use virtual currencies as part of investment platforms have been promoted from Italian entrepreneurs (for example, Friendz Coin, AidCoin, Eidoo and Xriba). It seems that none of these projects has been developed in Italy or by an Italian company that applies Italian law. Xriba is registered in the Isle of Man and in other projects in Switzerland.
Virtual currency service providers in Italy (ie any natural or legal person providing professional services to third parties the parties to use, exchange or store virtual currencies and convert virtual currencies from or in currencies with legal currency status) are subject to registration in a special section of the foreign exchange registry. (8)
To populate the special section of the trade register effectively, the Consumer Credit Act imposes a decree from the Ministry of Economics and Finance setting out the procedures and times when virtual service providers they must communicate their operations in Italy to the ministry. Communication is an essential condition for the legal activity of such virtual currency service providers. The decree establishes forms of cooperation between the Ministry of Economics and Finance and the police, which may result in prohibition for virtual service providers who do not comply with the notification obligation
Point of view of the Securities Act [19659002] Virtual currencies used for investment purposes appear to fall within the broad definition of "investment products" under the Securities Act (Legislative Decree 58/1998) , as subsequently amended. Investment products in Italy include financial instruments (ie securities) and "any other form of financial investment". (9)
Investment products are subject to the same rules and restrictions as are applicable to the supply of financial instruments or securities to the public in Italy. In particular, unless an exemption is available, a prospectus authorized by CONSOB (the securities regulatory authority) must be published. (10)
The main exemptions available, pursuant to article 34 of CONSOB Regulation 11971/1999, as subsequently amended, are:
- the exemption from 150 investors resident in Italy ( no prospectus authorized by CONSOB is required if the investment products are sold to less than 150 investors in Italy); o
- the exemption for qualified investors (no prospectus authorized by CONSOB is required if the investment products are sold exclusively to qualified investors in Italy).
Investment products are also subject to other regulations and restrictions on the marketing and sale of financial products outside normal business premises pursuant to the Securities Act. (11)
Virtual currencies represent an unexplored territory in Italy for various reasons. Current rules and restrictions will probably need structural adjustments to make them work in this new environment. The fact that the issuer of virtual currencies for investment purposes is in most cases based in a foreign country (often outside the European Union) could make the scope of the current exemptions under the Securities Act too broad (especially considering that such offers would be launched in parallel in many different countries and markets.
The traditional approach to combating money laundering and data protection could risk providing inadequate responses to the virtual currency challenge. For example, the blockchain structure, which is the backbone on which virtual currencies are exchanged, appears to be in contrast to some of the newly introduced principles of the EU's privacy law, in particular the right to cancel or rectify data is in conflict with the fragmentation of data on hundreds or thousands of computers, which is one of the key elements of the blockc has in.
The geographical nature and structure for the creation, distribution and use of virtual currencies make the current legal framework inadequate to address all new challenges and will require different structural adjustments. The use of regulatory sandboxes could prove to be the most effective way to test new ways of regulating this phenomenon and moving forward from a regulatory point of view.
For further information on this topic please contact Andrea Giannelli [19659035] or Marzio Ciani at Legance Avvocati Associati by phone (+39 02 89 63 071) or e-mail (agiannelli @ legance. it or [email protected] ). The Legance Avvocati Associati website is available at www.legance.it .
Final Notes
(1) Bank of Italy, Disclaimer on & # 39; use of the so-called virtual currencies published on 30 January 2015.
(2) Bank of Italy, Warnings for the risks of virtual currencies by the European Authorities published on 19 March 2018.
(3) Legislative Decree 25 May 2017, n. 90, which implements the fourth EU anti-money laundering directive (2015/849 / EC), which modifies the OTC derivatives of the EU, the central counterparties and the regulation on commercial archives (648/2012) and repeals the Third EU Anti-Money Laundering Directive (2005/60 / EC).
(4) Article 1 (2) (letter qq) of the Money Laundering Act. [19659003] (5) However, in the fiscal ruling 72 / E / 2016, the tax authority requested that the virtual currencies be reported in the same section (RW section of the Italian tax return) for tax purposes and following the same approach used for foreign currencies
(6) Pursuant to Article 1277 of the Italian Civil Code "monetary obligations must be met by money having legal tender in Italy at the time of payment".
(7) Article 17 bis (1) of the Consumer Credit Act (Legislative Decree 141 of 13 August 2010), which implements the Consumer Credit Agreement 39; EU Directive (2008/48 / EC) in Italy, which repeals the EU Consumer Credit Directive (87/102 / EEC).
(8) Pursuant to Article 17 bis (8 bis ) of the Consumer Credit Act
(9) Ai pursuant to article 1 (1, letter u) of the Securities Act.
(10) Pursuant to article 94 of the Securities Act.
(11) For these reasons , with Resolution 19968 of April 20, 2017, CONSOB banned any marketing activity through www.coinspace1.com in relation to a public offer of Coinspace Ltd of virtual currency mining packages
article was first published by the International Law Office, a premium online legal update service for leading companies and law firms around the world. Sign up for a free subscription.
