Is cryptocurrency legal in Finland?

Finland has emerged as a country that not only recognizes the growing importance of cryptocurrencies but also establishes a regulatory framework to oversee their use. The legal status of cryptocurrencies in Finland provides a fascinating case study on how a nation can embrace the potential of blockchain technology and digital currencies while instituting measures to protect consumers and maintain financial integrity.

Legal Status and Regulatory Framework

In Finland, cryptocurrencies are legal, and their trading, buying, and holding are permitted under Finnish law. This progressive stance was solidified with the implementation of the Act on Virtual Currency Providers, which took effect on May 1, 2019. As reported by Finnish news outlets, the act has been a topic of public interest, signifying the country’s proactive approach to new financial technologies. The act stipulates that virtual currency providers, including cryptocurrency exchange services, custodian wallet providers, and issuers of virtual currencies, must register with the Finnish Financial Supervisory Authority (Fin-FSA). This registration process is crucial as it subjects these providers to a set of statutory requirements aimed at ensuring their reliability, the security of client funds, and compliance with comprehensive anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

The Act on Virtual Currency Providers is aligned with the European Union’s broader regulatory approach, notably the 5th Anti-Money Laundering Directive (5th AMLD), reflecting a concerted effort to integrate virtual currency providers into the scope of AML/CFT regulation. This regulatory approach underscores Finland’s commitment to fostering a safe and transparent cryptocurrency environment.

Taxation of Cryptocurrencies

Finland’s taxation authority, Vero, has provided guidance on the taxation of cryptocurrencies, treating them as personal assets. This treatment implies that gains from cryptocurrency transactions are subject to capital gains tax if the gains exceed €1,000 during the tax year. The capital gains tax rate depends on the total amount of capital gains, with the possibility of income tax on earned income from cryptocurrencies, which can be up to 44%, depending on the taxpayer’s total income and the municipality’s tax rate.

For tax calculation purposes, Finland employs the First In, First Out (FIFO) method. This method assumes that the first units of cryptocurrency bought are the first ones sold, which is essential for determining capital gains or losses. Moreover, for investors who cannot determine their original acquisition costs, a deemed acquisition cost method is available, allowing them to deduct a fixed percentage of the sale price instead of the purchase price.

Cryptocurrency Services and Consumer Protection

The Finnish Financial Supervisory Authority (FIN-FSA) plays a crucial role in regulating cryptocurrency services, ensuring they comply with AML/CFT obligations and consumer protection requirements. Cryptocurrency service providers must furnish consumers with sufficient information regarding the risks associated with cryptocurrencies, further emphasizing the country’s focus on transparency and consumer safety【8†source】.

Cryptocurrency Adoption and Usage

Despite not being considered legal tender, cryptocurrencies like Bitcoin, Ethereum, and Litecoin have gained popularity in Finland, with increasing interest in other digital assets such as Dogecoin, Tether, Cardano, USDT, XRP, and Monero. The legality of trading these digital assets, subject to Finland’s regulatory frameworks, opens up a wide array of opportunities for Finnish citizens and residents to participate in the global cryptocurrency market.


Finland’s balanced approach towards the regulation and taxation of cryptocurrencies serves as a model for other countries grappling with the challenges and opportunities presented by digital currencies. By providing a legal framework that encourages innovation while ensuring financial safety and integrity, Finland positions itself as a forward-thinking nation ready to harness the benefits of blockchain technology and cryptocurrencies. This regulatory environment not only protects consumers but also promotes the growth of the cryptocurrency sector, making Finland an attractive destination for crypto entrepreneurs and investors alike.

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