Romania's government issued an emergency decree this month requiring crypto exchanges and digital wallet operators to register with state authorities. Officials said the move would help combat money l
Romania's government issued an emergency decree this month requiring crypto exchanges and digital wallet operators to register with state authorities. Officials said the move would help combat money laundering, tax evasion, and other financial crimes that they argue cryptocurrencies enable through their encrypted, pseudonymous architecture.
The European Union's Fifth Anti-Money Laundering and Terrorism Financing Directive, known as 5AMLD, sets baseline standards across all EU member states. Individual countries retain authority to impose stricter rules. Romania used that authority to enact an emergency ordinance, the GEO, that went much further than the baseline requirements. The decree increases regulatory power over the sector beyond what 5AMLD provides.
Under the GEO, any exchange or wallet service operating in Romania must obtain direct government authorization. Firms that meet 5AMLD requirements in other European Economic Area countries cannot serve Romania without completing a separate local registration. Applicants must demonstrate that their home country considers them compliant. They must also assign a local representative with authority to handle contracts and represent their businesses in Romanian courts.
Operators who fail to comply face serious consequences: regulators can shut off their internet, radio, and television access.
Officials designed these requirements to prevent criminals from abusing cryptocurrency. Instead, the rules have created difficulties for startups and established crypto companies attempting to operate in Romania.
Bottle Pay, a UK-based Bitcoin wallet provider, explained its decision to stop serving the EU market after 5AMLD took effect. "The amount and type of extra personal information we would be required to collect from our users would alter the current user experience so radically, and so negatively, that we are not willing to force this onto our community," the company said.
Other jurisdictions have taken different paths. Singapore and Sweden crafted crypto regulations that support industry development. Romania chose a more restrictive approach.
