Tighter controls and tax transparency are coming to the cryptocurrency market with provisions in the new capital market bill regulating crypto transactions in Greece.

Those wishing to exchange cryptocurrencies for euros will now be subject to a process akin to a “preliminary tax audit“, while all crypto exchanges such as Binance, Coinbase and Kraken will have to obtain an official license from the Greek authorities or appoint a local contact person, who will be responsible for data transmission.

The new framework ends anonymous cryptocurrency trading and strengthens controls to combat money laundering and tax evasion. Platforms will now be required to transmit detailed transaction data to the Greek authorities in order to cross-check the origin of money and identify suspicious transactions. In addition, if the Capital Market Commission or the Money Laundering Authority detects suspicious crypto transfers, it will be able to “freeze” transactions and require a tax and asset audit of the trader.

This means that now users who want to exchange large amounts of cryptocurrency for euros will have to be fully transparent about their financial information.

This design, which goes a step ahead of international practices, comes from Giorgos Christopoulos, Secretary General for Economic Policy and Strategy at the Ministry of Economy and Finance. The aim is to combat tax evasion and money laundering through measures that bring cryptocurrency transactions under tighter supervision.

Until now, exchanging cryptocurrencies for euros has been an unregulated process where users could convert large amounts without declaring the origin of the money or providing sufficient information to tax authorities. With the new bill, the process is made significantly stricter, requiring trader identification and a preliminary tax check before any crypto to euro conversion is completed.

Anyone who wants to convert cryptocurrencies to euros will need to follow these steps:

1. Identify and provide details: Crypto exchange platforms (Binance, Coinbase, Kraken, etc.) will ask users to provide personal and tax information such as ID, VAT, bank account and proof of origin of cryptocurrencies.

2. Preliminary tax check:If the transaction is deemed suspicious or exceeds a certain threshold, the authorities will conduct a cross-check of the user’s tax and asset information through the databases of the Ministry of Finance and the Securities and Exchange Commission.

3. Completion of transaction or referral for further verification: If no suspicious elements are found, the conversion of crypto into euros will be completed as normal. If there are indications of tax evasion, the case will be referred for further investigation to the competent authorities, who may request tax returns or block the transaction.

The new framework is based, inter alia, on the European Regulation 2024/1114, which entered into force on 30 December 2024, and enhances the protection of investors in cryptocurrencies. Specifically, crypto platforms are placed under the supervision of the Hellenic Capital Market Commission and the Bank of Greece, while operating without a license now constitutes a criminal offence, with a minimum of 1 year imprisonment and fines.

Strict penalties are provided for violations, including:

– Financial fines of up to €5 million or 12% of total annual turnover.
– License revocation or suspension for non-compliant platforms.
– Temporary ban of up to 6 months or permanent ban in case of recidivism for members of governing bodies who breach the law.
– Stricter regulation of cryptocurrency advertisements to inform investors of the risks, as losses are not covered by guarantee funds or state protection schemes.

The new framework is not limited to the domestic level, but aims for transnational cooperation to prevent the transfer of “black money” through crypto platforms outside of Greece. The Securities and Exchange Commission and money laundering authorities will have the right to investigate suspicious transactions, freeze funds and require tax and asset controls for those moving outside the rules.