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Does the law also apply to PFA intermediaries in the credit, deposit, and insurance sectors?

Answered by: Michaela Mokrá, Legal Associate, Hronček & Partners s.r.o.

The MiCA Regulation applies to the following crypto-asset services:

1. provision of custody and management of crypto-assets on behalf of clients - this is the custody or control of crypto-assets or means of access to such crypto-assets on behalf of clients, where applicable in the form of private cryptographic keys;
2. operation of a crypto-asset trading platform - means the operation of one or more multilateral systems that bring together or facilitate the bringing together of the interests of multiple third parties to buy and sell crypto-assets within the system and in accordance with its rules in a manner that results in a contract, either by exchanging crypto-assets for funds or by exchanging crypto-assets for other crypto-assets;
3. exchange of crypto-assets for funds - is the conclusion of purchase or sale contracts relating to crypto-assets with clients for funds using the firm’s own capital;
4. exchange of crypto-assets for other crypto-assets - is the conclusion of purchase or sale contracts relating to crypto-assets with clients for other crypto-assets using the firm’s own capital;
5. execution of orders relating to crypto-assets on behalf of clients - is the conclusion of contracts on behalf of clients for the purchase or sale of one or more crypto-assets or the subscription on behalf of clients for one or more crypto-assets and includes the conclusion of contracts for the sale of crypto-assets at the time of their public offering or admission to trading;
6. placing crypto-assets - means placing crypto-assets on the market for buyers, on behalf of or for the account of the person offering the crypto-assets, or a party affiliated with the person offering the crypto-assets;
7. accepting and transmitting orders relating to crypto-assets on behalf of clients - is the acceptance of an order to buy or sell one or more crypto-assets or to subscribe for one or more crypto-assets from a person and the transmission of that order to a third party for execution;
8. providing crypto-asset advisory services - means offering, providing, or agreeing to provide personalized recommendations to a client, either at the client’s request or at the initiative of the CASP providing the advisory services, regarding one or more transactions involving crypto-assets or the use of crypto-asset services;
9. provision of crypto-asset portfolio management - is the management of portfolios in accordance with the authorizations granted by clients, at the discretion of the CASP for individual clients, provided that such portfolios contain one or more crypto-assets;
10. provision of crypto-asset transfer services on behalf of clients - is the provision of crypto-asset transfer services on behalf of a natural or legal person from one address or account in a distributed transaction database to another address or account in a distributed transaction database.

Financial intermediation and financial advisory services are governed by Act No. 186/2009 Coll. on Financial Intermediation and Financial Advisory Services and on Amendments to Certain Acts, as amended (hereinafter “Act No. 186/2009 Coll.”).

The sectors in which financial intermediation and financial advisory services are provided have no bearing on the answer to this question, as cryptoasset services do not fall under the definition of a financial service within the meaning of Act No. 186/2009 Coll. However, a business entity that is a financial agent or financial advisor may also engage in other business activities, as the scope of its activities regulated by Act No. 186/2009 Coll. is not exclusive in nature.

Therefore, if a financial agent or financial advisor currently performs any of the cryptoasset services (e.g., providing advice on cryptoassets, receiving and transmitting orders related to cryptoassets on behalf of clients, managing a cryptoasset portfolio), they do not do so under Act No. 186/2009 Coll., but rather as an unregulated activity that is not supervised by the NBS.

However, as of December 30, 2024, pursuant to Article 59 et seq. of the MiCA Regulation, crypto-asset services may only be provided by:

1. crypto-asset service providers that have been granted a license by the competent authority to provide crypto-asset services,
2. certain types of financial institutions upon fulfillment of notification requirements.

If a financial agent wishes to continue performing activities that constitute the provision of crypto-asset services after December 30, 2024, they must apply to the NBS for authorization to perform one of the crypto-asset service activities.

As part of the license application, must the entity applying for a license have a bank account in the country where it is applying for the license? That is, if I am from Slovakia, do I need to have a bank account in Slovakia?

Answered by: Michaela Mokrá, Legal Associate, Hronček & Partners s.r.o.

In the licensing procedure, an applicant for a license to provide crypto-asset services must demonstrate that it has met the conditions under Article 70(1) and (3) of MiCA by taking appropriate measures to protect clients’ property rights.

According to the draft regulatory technical standards specifying certain requirements of the MiCA Regulation (ESMA18-72330276-1634), the applicant must, among other things, submit a detailed description of its policies and procedures for segregating crypto-assets and client funds, including how it ensures that client funds are held in an account separate from accounts belonging to the applicant. The description of procedures for segregating client funds must therefore include information on the bank accounts that the future crypto-asset service provider will maintain for this purpose. The applicant must also submit documents proving the segregation of client funds from its own accounts, such as a contract concluded with a financial institution regarding the opening of a bank account.

However, neither the MiCA Regulation itself nor the draft delegated acts impose such a requirement on crypto-asset service providers, requiring that such an account be opened by a financial institution in the same country as the location where the application for authorization to provide crypto-asset services is submitted. It is therefore possible for an applicant to use the services of financial institutions across borders (including bank account services or accounts at payment institutions), provided they can simultaneously demonstrate the segregation of funds.

Taxation of Cryptoassets – Amendment: Will the value of cryptoassets always have to be revalued at year-end based on market price and income tax paid accordingly?

Answered by: Róbert Kalmár, Tax Manager, VGD SLOVAKIA s. r. o.

Good day,

Allow me to answer your question regarding the revaluation of cryptoassets based on your request for a follow-up question.

Based on an analysis of the proposed consolidated text of the Act on Certain Obligations and Rights in the Field of Crypto-Assets and the amendment to the Accounting Act, there is no change in the accounting treatment of crypto-assets. This means that even after the amendment to the Act, virtual currency will be valued only as of the date of the accounting transaction, i.e., at the time of purchase, sale, exchange, and the like.

The amendment primarily focuses on clarifying the definition of cryptoassets and introducing a new registration requirement for entities engaged in cryptoasset mining. The taxation of cryptoassets remains essentially unchanged, with the exception of certain technical adjustments.

Therefore, even after the amendment to the law, there will be no requirement to revalue cryptoassets at year-end based on market price and subsequently tax the difference between the acquisition cost and the market price.

I hope this information is useful to you. Please do not hesitate to contact me if you have any further questions.