Crypto regulation in Portugal

Crypto Regulation in PortugalPortugal is often called the most attractive country in Europe for working with cryptocurrency and digital assets. This status is influenced not only by the Government’s liberal policy on digital assets, but also by the overall economic and social development of the country.

The Central Bank and other authorities have already taken some specific measures to regulate crypto-assets in Portugal in accordance with the European legal framework, especially with regard to measures to protect against money-laundering (AML) and/or the financing of crime.


For such purposes, cryptocurrencies can be defined broadly as a «digital representation of value not issued by a central bank, credit institution, or e-commerce, which in some circumstances can be used as an alternative to money». This definition corresponds to the classification of the European Central Bank (ECB), to which the Portuguese authorities have largely subscribed. Other regulations on crypto assets were developed by the European Securities and Markets Authority (ESMA) in its recommendations on ICOs and crypto assets (January 2019).

Due to the rapid development of the Fintech industry, blockchain technology in general and cryptocurrency in particular are the subject of discussion by the Portuguese government.

Over the past few years, these technologies have attracted public attention mainly because of the rising cost of Bitcoins, the increased interest in holding ICOs in Portugal and other countries, and their market capitalization.

In this country, cryptocurrencies do not have the status of legal tender and are not classified as fiat, nor are they considered as «money» or «electronic money». However, EBA issued a statement in 2019. It noted limited cases where cryptocurrencies can be considered «e-money» according to Directive 2009/110/EC (EMD2).

However, cryptocurrencies are largely seen as an alternative payment method with a contractual nature that is the result of a private agreement between cryptocurrency transaction participants, and with internal characteristics, which to some extent repeat the main features of traditional money:

  • Storage of value
  • Unit of account
  • Medium of exchange

In general, cryptocurrencies are not supported by the Portuguese government or the Central Bank, but are treated as financial instruments in certain cases.

Cryptocurrencies are also considered for their functionality. Regulators deal with utilite tokens and security tokens, which are usually sold through ICOs. They can be distinguished by their distinctive function, since the former are largely related to consumption and the latter to investment.

That is why the issue of regulation of these technologies has become an important topic for the attention of the relevant authorities, especially the Central Bank, the Portuguese Securities Office (CMVM) and the ASF. The CB has issued a number of public statements and warnings on cryptocurrencies in line with the regulatory practices of other eurozone central banks and European regulators such as the ECB and the EBA.

If you intend to obtain a crypto license in Portugal, it is important to bear in mind that the Central Bank has relatively recently issued Notice 3/2021, in which it regulates the registration of virtual asset service providers (VASP)that are operating in Portugal as a result of the transposition of EU Directive 2018/843 of 30 May 2018 into Portuguese law, in particular into the Portuguese AML system approved by Law 83/2017.

In turn, CMVM published warnings to investors about potential ICO risks to raise awareness of these risks. On July 23, 2018, CMVM issued a formal notice to all ICO participants regarding the legal qualification of tokens.

The CMVM stressed the need for all ICO participants to appreciate the legal nature of the tokens offered by the ICO, their possible qualification as securities, and the subsequent application of securities law. In this context, CMVM noted that tokens can represent very different rights and credits and can be sold in organized markets.

Therefore, if you intend to conduct an ICO in Portugal, it is worth taking into account that tokens can be classified as securities under Portuguese law, especially given the broad definition of securities under the Securities Code.


The service providers listed above are subject to the general AML framework for non-financial organizations. Such actors should, inter alia:

  • To monitor the risks of money-laundering and the financing of terrorism arising from the development or use of new technologies;
  • Exercise due diligence in the client’s business, one-time or ongoing operations;
  • Develop and implement policies, procedures and controls to manage money-laundering risks;
  • Identify customers and business owners (through the KYC procedure);
  • Collect and store information on business relationships with customers;
  • Analyze and thoroughly check transactions based on risk assessment;
  • To report and cooperate with the competent authorities on suspicious transactions.

To identify suspicious transactions, you should use a common set of indicators (trigger events). In particular, we are talking about the «red flags» recommended by FATF (Financial Action Task Force on Money Laundering). Among them:

  • Transaction-related indicators: size, frequency and nature of transactions;
  • Indicators relating to anonymity;
  • Indicators on senders and receivers: namely, customer profiles and violations;
  • Indicators related to the origin of funds;
  • Indicators related to geographical risks (counterparty jurisdictions).

High AML-risks are traditionally associated with certain categories of persons:

  • persons and organizations working in offshore zones;
  • «politically significant persons» (including «close family members» and «persons with recognized and close relations of corporate or commercial character»);
  • individuals and organizations on sanctions lists of the UN Security Council, OFAC (Office for Foreign Assets Control of the US Ministry of Finance), the EU Council and so on;
  • Persons and entities designated in orders issued by sectoral authorities for enhanced precautionary measures.

ICO regulations

ICOs that aim to offer tokens representing rights and/or economic interests in a predetermined enterprise, project or company can potentially qualify as securities and be subject to existing securities rules, primarily the rules applicable to public offerings of securities and/or trading platforms. The launch of the ICO in Portugal can be regulated by EU legislation such as:

  • Financial Instrument Markets Directive (MiFID II);
  • Regulation of the market of financial instruments (Regulation 600/2014) and relevant implementing acts;
  • Provisions on market abuse;
  • Directive 2009/44/EC;
  • Regulation on the Central Securities Depository;
  • Investment Fund Management Directive (AIFM).

CMVM stated that the token, which allows its users to participate in surveys related to the development of the online platform, as well as the further donation of tokens to the online platform, is not considered to be a finishing tool, that is, not a security token. The regulator has clarified the characteristics which, in an abstract form, may imply the qualification of securities tokens as securities, namely:

  • If they can be considered to represent special economic rights;
  • if the functions of the tokens are similar to typical securities.

The CMVM also regulates that if the token has the characteristics of the securities and the ICO is offered to investors from Portugal, such transactions should be regulated by national and EU laws that are related to:

  • issuing, presenting and transferring securities;
  • a proposal to the public (if applicable);
  • marketing of financial instruments for MiFID II purposes;
  • information quality requirements; and
  • market abuse rules.

Finally, if the ICO qualifies as a public offer, the CMVM further clarifies that the prospectus should be drafted and submitted together with any marketing material for the ICO for approval by the CMVM, provided that no exceptions apply to the obligation to draw a prospectus.

VASP procedure

As mentioned earlier, the AML Act introduced a mandatory registration requirement for all VASP’s activities in Portugal. The registration procedure must be established in accordance with Article 112-A of the AML Act and Notification Banco de Portugal 3/2021 of 24 April 2021.

The following organizations are considered to be active in the territory of Portugal:

  • Portuguese companies (registered in Portugal);
  • Legal entities with permanent representation in Portugal; and
  • Organizations that are obliged to operate under the supervision of the Portuguese tax authorities.
  • The Central Bank is the competent authority for the registration of crypto companies in Portugal and the verification of compliance with applicable legal and regulatory provisions governing the implementation of AML by the above-mentioned persons.

According to the Portuguese AML Act, since VASP is now considered to be «obligated persons”, a general obligation to manage risks when using new technologies or products that promote anonymity is mandatory. This means that VASP is required by law to monitor, analyze and document specific procedures to eliminate any specific risks of money laundering and the financing of criminal activities. In addition, the obliged persons must carry out procedures of identification and proper verification of clients for transactions of more than 15 thousand. EUR, as well as strengthen their procedures of identification and proper verification of customers, when they reveal an additional risk of money laundering or financing of crime in business.


Portugal does not have a special regime concerning the tax regime of cryptocurrencies. However, the tax authority issued three regulations concerning cryptocurrencies. In the absence of other laws and regulations that could clarify the taxation regime of cryptocurrencies, these regulations are important and will work as precedents as to whether as the Portuguese Revenue Authority will consider cryptocurrency and cryptocurrency-related activities when interpreting existing tax provisions and deciding whether a certain fact or action should be taxed by the Portuguese (corporate, individual, VAT or stamp duty).

Companies that provide services related to cryptocurrency are taxed on capital gains at a rate of 28 to 35%.

Our highly experienced and trusted lawyers will be pleased to provide you with tailored support in registering with the Register of Virtual Currencies and in obtaining a crypto licence in Portugal. We closely monitor local regulations and are therefore well-prepared to guide our clients through every stage of the registration process in an efficient manner. 

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