The country’s financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), is a pioneer in the EU with its official Bitcoin Communiqué 2014. It stated that even if there is no specific legal framework, the existing traditional financial regulation may apply and that Bitcoin may qualify as “scriptural money” if broadly adopted as a means of payment by its user network.
Moreover, the CSSF was the first in the EU to licence Bitstamp, the oldest digital currency trading platform in the world. Besides, one of the largest Japan’s electronic money exchanges bitFlyer was granted the same license by the CSSF in 2018. As a result, bitFlyer is licensed in Japan, the EU (via Luxembourg) and in 43 of the U.S. states.
On 14 March 2018 the CSSF issued two new documents: VC Warning 2018 and ICO Warning 2018. The main goal of these two warnings was to inform the public about existing risks of holding and investing in virtual currencies and ICOs. However, Bitcoin Communiqué was not denounced and it is still in force.
In a nutshell, Luxembourg’s regulator is in constant contact with active digital money platforms that are already present or supervised, and VNX Exchage expects that the CSSF will continue to consider every new application under one of the possible existing licenses.