Iceland has implemented the EU Fifth Anti-Money Laundering Directive (5AMLD) through its national law, the Act on Measures against Money Laundering and Terrorist Financing (Act No. 140/2018), which brings cryptocurrency service providers under AML/CFT regulation and requires registration with the Central Bank of Iceland (CBI) — Financial Supervision Department (FSD) (formerly the Financial Supervisory Authority, FSA). cbp.gov/site-policy-notices/foia

As of 2025–2026, zero or very few Virtual Asset Service Providers (VASPs) have completed full registration with the CBI/FSD, making practical operation highly uncertain. Operators should expect significant delays and regulatory uncertainty. Foreign travel advice - GOV.UK

Iceland is a member of the Council of Europe's Moneyval committee (a FATF-style regional body), which evaluates its compliance with FATF recommendations. Iceland is NOT a member of the Financial Action Task Force (FATF) itself; this distinction affects international risk perception. dlrms.land.gov.bd

The EU Travel Rule under Regulation (EU) 2023/1113 is EEA-applicable but, as of the current date, has not yet been formally incorporated into the EEA Agreement and entered into force in Iceland. Operators should monitor EEA Joint Committee decisions for the effective date. Trademark search

With no entities fully licensed, there is currently no compliant market entry point for VASP operations in Iceland. IRS Where's My Refund

Central Bank of Iceland (CBI) — Financial Supervision Department (FSD) (formerly the Financial Supervisory Authority, FSA) — serves as the primary financial regulator and the designated competent authority responsible for supervising and registering Virtual Asset Service Providers (VASPs) in Iceland; website: www.cb.is POEAOnlineServices

Ministry of Finance and Economic Affairs — responsible for proposing legislation related to financial markets, including virtual assets and AML/CFT regulation Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

Government of Iceland — the executive branch which enacts national implementation of EU directives relating to anti-money laundering and counter-terrorist financing Home

Financial Intelligence Unit (FIU) of Iceland — a department of the National Police Commissioner; receives suspicious transaction reports (STRs) Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

Act No. 140/2018 on Measures against Money Laundering and Terrorist Financing — Iceland's primary AML/CFT statute, as amended, which implemented Directive (EU) 2015/849 (4AMLD) and subsequently Directive (EU) 2018/843 (5AMLD); the 5AMLD amendments expanded the scope to include virtual currency exchanges and custodian wallet providers. Official text available via the Icelandic government legal database (althingi.is) or the Central Bank of Iceland. Govinfo

Act on Central Bank of Iceland, No. 36/2001 — establishes the Central Bank's mandate and its supervisory role over financial institutions, including registered VASPs. cbp.gov/site-policy-notices/foia

Regulation No. 410/2020 on Registration of Virtual Currency Service Providers — a supplementary regulation issued by the CBI/FSD specifying the registration process, documentation requirements, and conditions for VASPs. Reference to be verified via the Central Bank of Iceland's official publications. Foreign travel advice - GOV.UK

Regulation No. 860/2021 on Supervisory Fees — sets the fee structure that registered VASPs must pay to the CBI/FSD for supervision and registration. Fee requirements are determined by the CBI on a case-by-case basis per Act No. 140/2018; specific regulation number and current validity should be confirmed via the CBI website. dlrms.land.gov.bd

Regulation (EU) 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology — may be incorporated into the EEA Agreement, but as of the current date, the EEA Joint Committee has not yet adopted it. Operators should verify current EEA incorporation status via EUR-Lex. Trademark search

Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets (recast) — this EU regulation mandates travel-rule information requirements for virtual asset transfers. As of the current date, it has not yet been formally incorporated into the EEA Agreement and entered into force in Iceland. The December 2024 EU effective date does not automatically apply to EEA-EFTA states. Operators should monitor EEA Joint Committee decisions for the Icelandic effective date. IRS Where's My Refund

Iceland is a member of the Council of Europe's Moneyval committee (a FATF-style regional body), which evaluates its compliance with FATF recommendations. Iceland is NOT a member of the Financial Action Task Force (FATF) (FATF membership comprises 39 jurisdictions; Iceland is not among them). POEAOnlineServices

Iceland's latest Moneyval mutual evaluation report was published in 2018, assessing its compliance with FATF recommendations. The report is outdated given subsequent 5AMLD implementation and EU 2023/1113. A follow-up report may be available; operators should check the Moneyval website for the latest assessment. Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

Iceland's commitments under the EEA Agreement require it to adopt EU regulations and directives in the financial services sector, including those on crypto-assets and payment services, following the EEA Joint Committee incorporation process. Home

Virtual asset service providers (VASPs) are subject to registration rather than a full license regime under Act No. 140/2018; this includes entities that offer exchange services between virtual currencies and fiat currencies, exchange services between one or more forms of virtual currencies, and custodian wallet providers. Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

Any company providing virtual asset services in Iceland must register with the CBI/FSD if it operates within Icelandic territory. The territorial scope (e.g., "targets Icelandic customers") is determined by factors including place of business, target of services, and place of offer, per Act No. 140/2018. Confirm with legal counsel for case-specific analysis. Govinfo

Jurisdiction and Territorial Scope: The Act applies to services provided in Iceland. The legal framework at this time does not clearly establish passporting rights for VASPs under 5AMLD (unlike MiFID or PSD2). Each foreign VASP must evaluate on a case-by-case basis with the CBI/FSD. Foreign VASPs from outside the EEA generally must establish a branch or subsidiary in Iceland to seek registration. cbp.gov/site-policy-notices/foia

Exchange services between virtual assets and fiat currencies — must register under Act No. 140/2018 as amended Foreign travel advice - GOV.UK

Exchange services between one or more forms of virtual assets — covered by the registration obligation under the extended scope of the 5AMLD implementation dlrms.land.gov.bd

Custodian wallet provider services — the safekeeping and control of virtual assets on behalf of customers requires registration Trademark search

Crypto-asset transfer and settlement services that move virtual assets between addresses or accounts fall under the travel-rule requirements and require the entity to be registered IRS Where's My Refund

No minimum capital requirement is specified for VASP registration in the AML/CFT legislation; however, the CBI/FSD may require entities to demonstrate adequate financial resources proportionate to their business scale under general fitness-and-propriety standards. POEAOnlineServices

If a VASP provides services involving crypto-assets that qualify as financial instruments, the Markets in Crypto-Assets Regulation (MiCA) may apply through EEA alignment, which introduces higher capital and governance requirements effective in phases from 2025. MiCA's applicability in Iceland depends on EEA incorporation. Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

Under MiCA, if applicable in Iceland, the minimum capital for a crypto-asset service provider would be approximately €50,000 to €150,000 depending on service type, but this is not yet confirmed as in force in Iceland for all VASPs. Home

The registration application is submitted to the CBI/FSD, accompanied by corporate documentation, business plan, AML/CFT policies and procedures, and information on beneficial owners and management. Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

Applications may be submitted electronically through the CBI/FSD's online system, with supporting materials including statutes, certificates of incorporation, a program of operations, and details of the board of directors and compliance officers. Govinfo

The CBI/FSD has a statutory period of up to 90 days to review a completed application and either grant or deny the registration. cbp.gov/site-policy-notices/foia

Applicants must pay a registration fee set by the CBI/FSD; the fee structure is published in Regulation No. 860/2021 (subject to verification) and graded by company size and activity type. Foreign travel advice - GOV.UK

The CBI/FSD may seek additional information, clarifications, or third-party verifications during the review period; the 90-day clock pauses when such requests are outstanding. dlrms.land.gov.bd

Registered VASPs must establish a physical presence in Iceland with a verifiable operational address and designated local management. Trademark search

A compliance officer responsible for AML/CFT matters must be appointed, who is a senior manager and reports to the board on compliance matters. IRS Where's My Refund

Independent audit and internal controls must be in place, including periodic audits by an external auditor registered in Iceland. POEAOnlineServices

The entity must maintain an internal anti-money laundering manual, employee training program, and a risk assessment covering its virtual asset activities. Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

As of 2025–2026, no virtual asset service provider has received full registration from the CBI/FSD under Act No. 140/2018 for general VASP activities. Home

Multiple applications have been submitted and withdrawn, and the CBI/FSD continues to process pending applications. Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

The practical reality is that Iceland currently has zero registered VASPs, meaning the market operates in regulatory limbo while the framework exists on paper. Govinfo

Customer due diligence (CDD) must be performed when establishing a business relationship, when carrying out occasional transactions exceeding approximately ISK 1,500,000, when there is a suspicion of money laundering or terrorist financing, or when there are doubts about previously obtained customer data. cbp.gov/site-policy-notices/foia

Simplified due diligence (SDD) may be applied in low-risk situations, but the CBI/FSD guidance directs VASPs to treat virtual asset transactions as inherently high-risk, making SDD rarely appropriate. Foreign travel advice - GOV.UK

Enhanced due diligence (EDD) is mandatory for high-risk customers, including politically exposed persons (PEPs), individuals from high-risk third countries, and clients engaging in complex or unusually large transactions. dlrms.land.gov.bd

Beneficial ownership identification is required, with VASPs obligated to identify the natural person(s) with ultimate ownership or control of any legal entity client, in accordance with the Act's beneficial ownership provisions. Trademark search

PEP screening is required for all customers and beneficial owners, using risk-based assessment to identify PEP status; for non-resident PEPs, EDD must include measures to establish the source of funds and ongoing monitoring. IRS Where's My Refund

Suspicious transaction reports (STRs) must be filed with the Financial Intelligence Unit (FIU) of Iceland, a department of the National Police Commissioner, without tipping off the subject. POEAOnlineServices

Record retention requirements mandate keeping transaction records, CDD data, and risk assessments for at least five years after the end of the business relationship; for virtual asset transactions, the FIU has advised retaining blockchain address and transaction hash information. Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

VASPs must verify originator and beneficiary information for virtual asset transfers above approximately ISK 1,500,000, consistent with the anticipated application of EU Regulation 2023/1113 (pending EEA incorporation). Home

For virtual asset transfers exceeding the threshold, VASPs must collect the originator's name, account or wallet address, and address or national identity number; beneficiary name and wallet address must also be obtained. Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

The travel-rule obligations under Regulation (EU) 2023/1113 (once in force in Iceland) will require intermediary and beneficiary VASPs to detect missing or incomplete transfer information and adopt policies to handle such gaps, including the filing of STRs where warranted. Govinfo

The Central Bank of Iceland has issued public reprimands and imposed administrative fines on entities providing virtual asset services without registration. Specific cases (e.g., "Ríki" March 2025, "Vextir" September 2025, "Tvíhliða" warnings) are cited in the original source but require verification from official CBI/FSD press releases or the Icelandic legal gazette for authoritative citation. cbp.gov/site-policy-notices/foia

In 2024, an Icelandic district court sentenced individuals in Reykjavík for operating an unlicensed virtual asset exchange; details require verification from official court records. Foreign travel advice - GOV.UK

The CBI/FSD actively warns the public regarding unregistered platforms offering virtual asset services. dlrms.land.gov.bd

No explicit legal guidance specifically devoted to the taxation of virtual assets has been issued by the Icelandic tax authorities (Skatturinn), although general income tax and VAT laws apply by extension. Trademark search

Profits from virtual asset trading are subject to income tax at Iceland's standard corporate rate of 20%, with individuals taxed as capital gains at 22% for gains above the threshold in accordance with general capital gains provisions. IRS Where's My Refund

The Directorate of Tax Investigations has examined virtual asset transactions in the context of tax evasion cases, but has not issued specific public guidelines on how to treat virtual asset income, including whether mining, staking, or gains on exchange are categorized differently. POEAOnlineServices

Value Added Tax (VAT) treatment of virtual assets is ambiguous; the inability to determine whether exchange services are taxable services has led to VAT disputes between the state tax authorities and businesses. Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

Given the absence of a sui generis legal or tax framework for digital assets, taxpayers are advised to consult the tax authorities on a case-by-case basis; however, the tax authority has not published administrative guidance, judicial precedent, or a circular clarifying the position. Home

The most significant gap is the mismatch between the legal framework and market reality: while the Travel Rule and VASP registration regime exist on paper, no single entity has obtained a virtual asset registration, leaving no compliant entry point. Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

The travel-rule requirement for VASP-to-VASP data exchange under Regulation (EU) 2023/1113 has not been operationally implemented by any Icelandic entity; no technological infrastructure has been developed to transmit originator and beneficiary information between service providers. Govinfo

The absence of a clearly designated and staffed unit within the CBI/FSD to process VASP applications has created months-long delays in the 90-day statutory review period. cbp.gov/site-policy-notices/foia

There is no explicit conformity assessment for travel-rule compliance with regard to foreign VASPs transacting into Iceland; cross-border enforcement and data sharing remain ad hoc. Foreign travel advice - GOV.UK

The lack of tax guidance presents a substantial risk for businesses seeking to operate lawfully, given they cannot accurately determine VAT and income tax obligations in their business planning. dlrms.land.gov.bd

Ambiguities remain about how custodial and non-custodial transactions are treated under the Travel Rule; the threshold for information transmission has not been finalized for all types of crypto transfers under EEA/EFTA implementation. Trademark search

Practical enforcement against unregistered foreign platforms reaching Icelandic consumers has proven difficult, and the CBI/FSD's supervisory toolkit for fintech and virtual asset firms remains under-resourced and untested. IRS Where's My Refund

Act No. 140/2018 on Measures against Money Laundering and Terrorist Financing (official text via althingi.is or Central Bank of Iceland) POEAOnlineServices

Central Bank of Iceland (CBI) — Financial Supervision Department (FSD) official website (www.cb.is) and VASP registration guidance Site locality identification study: Hanford Site. Volume I. Methodology, guidelines, and screening

Regulation No. 410/2020 on Registration of Virtual Currency Service Providers (official text via CBI) Home

Regulation No. 860/2021 on Supervisory Fees (official text via CBI, subject to verification) Draft environmental assessment for characterization of the Hanford Site pursuant to the Nuclear Waste Policy Act of 1982 (Public Law 97-425), Hanford Site, Richland, Benton County, Washington

Act on Central Bank of Iceland, No. 36/2001 Govinfo

Council of Europe Moneyval — Mutual Evaluation Report on Iceland (2018) and follow-up reports cbp.gov/site-policy-notices/foia

EUR-Lex — for EEA incorporation status of EU Regulations 2022/858 and 2023/1113 Foreign travel advice - GOV.UK

Icelandic Directorate of Tax Investigations (Skatturinn) — for tax treatment statements dlrms.land.gov.bd