Police and the Treasury will have access to the new register of crypto account holders

The Spanish government has announced plans to create a new national registry that will require cryptocurrency operators to disclose information about account openings and closures, marking a major step in its efforts to combat money laundering and illicit financial activities. The initiative, part of broader regulatory reforms under the Ministry of Economy led by Carlos Cuerpo, aims to bring greater transparency to the financial system by tracking ownership of accounts involving cryptocurrencies. Under the proposed legislation, entities such as investment fund managers, venture capital firms, securities agencies, and crypto platforms will be required to report detailed records of all account activity. This includes the name of the account holder, the institution where the account was opened, the type of account, whether cash, securities, or crypto, and the dates of opening and closure. While the registry will not include balances or transaction histories, it will provide critical data for law enforcement and tax authorities to trace illicit funds. This move comes amid growing concerns over the role of cryptocurrencies in facilitating illegal transactions. According to a report by TRM Labs, illicit flows through crypto assets reached $158 billion last year, driven in part by the anonymity they offer users. Money laundering often occurs through less-regulated channels, including cryptocurrency ATMs, peer-to-peer trades, and platforms with weak security measures or located in jurisdictions with lax oversight. In Spain, police have already uncovered several cases where criminal networks used crypto ATMs to launder proceeds from drug trafficking. The new registry, known as the Financial Holder Registry, will be managed by the newly established National Financial Integrity Authority (Anifi). It will replace the existing Financial Holder File, which has been collecting data on current accounts since more than a decade ago. Under the updated framework, each query made against the registry must be justified and logged, with access restricted to authorized officials such as judges, prosecutors, police, the Guardia Civil, the Tax Agency (AEAT), or the National Intelligence Center (CNI). A key innovation in this reform is the requirement for financial institutions to identify whether an account holder is itself subject to anti-money laundering obligations. This means that individuals flagged as high-risk due to their involvement in financial crimes will be tracked more closely. Additionally, the retention period for closed accounts will be extended from the previous standard, remaining in the registry for five years after closure, potentially up to ten years in total. Spain’s approach reflects a broader European Union strategy to tighten controls on digital finance. The EU has been increasingly targeting crypto assets as a tool for money laundering, particularly given their cross-border nature and the difficulty of tracing transactions. By requiring crypto platforms to comply with similar reporting standards as traditional banks, Spain is aligning itself with international efforts to close loopholes in financial regulation. The implementation of these rules will likely face challenges, especially regarding compliance from smaller crypto exchanges and private wallet providers. However, the government has stated that the majority of platforms are already registered with the Bank of Spain and will need to adjust their practices accordingly. As the legal framework takes shape, the focus will shift toward ensuring consistent enforcement and monitoring of the new requirements.