Crypto Regulations in Sweden
The legal framework for cryptocurrencies has conflicting laws and contradicting policies. While some government authorities have issued warnings about the risks associated with cryptocurrency, other Swedish authorities have officially recognized the benefits of the new technology. Sweden’s financial regulator, Finansinspektionen (FI), warned the public about the high risks and low consumer protections associated with cryptocurrency investments. The FI elaborated that cryptocurrency investments are “unsuitable for most… consumers” because it is “difficult, if not impossible, to value on a credible basis.” Arguably, cryptocurrency is hard to value on a credible basis because it has no real intrinsic value since it is not backed by gold, silver, or a national government (like fiat currency). Since it has no intrinsic value, it may be hard to value on a credible basis.
Source: Freeman Law
In Sweden, there are no laws dealing specifically with cryptocurrencies. Nevertheless, cryptocurrencies may fall under Sweden`s general legal framework. One possible regime under which virtual currencies fall is the “Markets in Financial Instruments Directive” (MiFID II).
Source: RisiStone
Recently, the Swedish Financial Supervisory Authority (FSA) has focused on companies acting within the crypto space, with attention turned primarily to compliance with AML regulations. On 21 October 2021, the FSA announced that it had launched investigations into a number of companies trading in cryptocurrencies. In its press release, the FSA states that trading with cryptocurrencies is regarded as a high-risk practice in relation to the AML regulatory framework. The investigations have not been concluded, so no conclusions can yet be drawn as to what actions the affected companies should take in order to mitigate risks related to AML regulation. In this regard, it has also been increasingly challenging for companies within the crypto space to meet the requirements set out by third parties such as payment providers and banks, who highlight the risks related to AML compliance.
Source: Chambers and Partners
Crypto is legal in Sweden and is recognized as a tradable asset rather than a currency. At present, Sweden does not have crypto-specific legislation for average traders. According to the Cambridge Center for Alternative Finance, Sweden`s average monthly hash rate (the computing power consumed per second during mining) increased by 0.84 percentage points between May and August 2021 after the Chinese ban.
Source: RisiStone
Virtual currencies are recognized as property under Swedish law, as it is possible for intangibles to have the legal status of property without a particular statute explicitly granting this status to a specific category of intangibles.2 Consequently, it is legally possible to own virtual currencies under Swedish law, and virtual currencies are afforded the same general protection as other types of property under the legal concept of ownership.
Source: The Law Reviews
Crypto-assets and cryptocurrencies – As of now, there is no specific legal or regulatory regime tailored to cryptocurrencies and/or crypto-assets in Sweden. Depending on the nature of the crypto-assets and services, these may be included under other regimes in Sweden, such as, inter alia, the Certain Financial Operations Reporting Duty Act, Electronic Money Act, and Payment Services Act. Furthermore, natural and legal persons who conduct cryptocurrency trading on a large scale or other financial operations are likely to be assessed as carrying out so-called “other financial operations” and are likely to be deemed as financial institutions as defined in Securities Market Act.
Source: Baker Mckenzie
There are no taxes involved when buying crypto. However, you need to ensure that you keep track of the price you paid for it to be added to your average cost basis (in Swedish this is called “omkostnadsbelopp”). If you purchased the crypto in a foreign currency (e.g. USD or EUR) make sure to convert it to the value in local currency on that day.
Source: Divly
On January 1, 2020, the Swedish Currency Exchange Act (SCEA) amendments became effective. Generally, the SCEA requires Swedish financial institutions to comply with anti-money laundering provisions. In addition, the new amendments expanded the scope of the SCEA to encompass custodian wallet providers and providers of virtual currency exchange services. Following the amendments, these institutions must follow Sweden’s anti-money laundering provisions or face legal liability. These provisions implement know-your-customer (KYC) regulations that require financial intermediaries to obtain customer information before facilitating transactions.
Source: Freeman Law
Technical progress and innovation have been increasingly important aspects of developments in Swedish society in recent years, with both established companies and start-ups contributing to this trend. Swedish investments in research and development (R&D) have remained stable, counting for a high-level percentage of GDP on a global and European comparison. As a result of blockchain and crypto-assets proving their relevance beyond hype and buzzwords, it has been pertinent for both the private and public sectors to expand on the technology through new use cases and developments. This article describes some significant current trends and examples of blockchain use in Swedish society.
Source: Chambers and Partners
A Swedish man wanted by the United States for defrauding over 3,500 victims of more than $16 million has been sentenced to 15 years in prison for securities fraud, wire fraud, and money laundering, the Department of Justice said Thursday. The DOJ says 47-year-old Roger Nils-Jonas Karlsson ran an investment fraud scheme from 2011 until his arrest in Thailand in June 2019. He pleaded guilty in March. According to court documents, Karlsson encouraged victims to buy shares in a scheme called “Eastern Metal Securities” using cryptocurrencies like bitcoin, promising “astronomical returns” tied to the price of gold. The funds paid by these victims were instead directed to Karlsson’s personal bank accounts, where the money was put toward expensive homes, a racehorse, and a resort in Thailand. Karlsson has been ordered to forfeit this Thai resort and various other properties and accounts as part of the sentence.
Source: CNBC
Sweden’s foreign minister has called for Ukraine to act following the exposing of an alleged cryptocurrency fraud operation duping naive investors from the country’s capital. The so-called “fraud factory,” working from two floors of plush offices in Kyiv, was exposed after an investigation by Swedish daily Dagens Nyheter (DN) published Monday. Called Milton Group, the firm was revealed to have employed ranks of telemarketers cold-calling potential investors, often older people, and offering inviting returns on money put into stocks and cryptocurrencies. However, DN writes in the report: “Their real operation is committing fraud on an industrial level – and their victims are from all around the world.”
Source: Coin Desk
Three convicted drug dealers will have over €1.3 million worth of Bitcoin returned to them by the Swedish government after a legal misstep saw prosecutors value the proceeds of their crime in Swedish Krona and not in crypto. Prosecutor Tove Kullberg successfully charged the men in April 2019, arguing that 36 Bitcoin seized by Swedish police the year before should be confiscated as they were earned through their illegal online drug sales. However, in her indictment, Kullberg converted the value of the cryptocurrency to Swedish krona, meaning the government was only legally entitled to seize the cash value of the Bitcoin at the time – roughly 1.3 million krona (€127,000).
Source: Euro News
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