The Legal Framework for the Prohibition of Cryptocurrency1 Mining and Other Virtual Assets was recently published by Law No. 3/24 of 10 April 2024.
Below we highlight the main aspects of this new legal regime:
- Scope: natural and legal persons in the field of mining cryptocurrencies and other virtual assets throughout Portugal;
- What is Cryptocurrency Mining? It's the process of generating, validating and including new transactions in the blockchain, which is responsible for guaranteeing the security of the network by deciphering cryptographic puzzles that result in the formation of "blocks";
- Prohibited activities: (i) mining of cryptocurrencies and other virtual assets, throughout the national territory; (ii) the use of any licences for electrical installations for the purpose of mining cryptocurrencies and other mineral assets; (iii) the connection to the National Electrical System of systems and equipment for the purpose of mining cryptocurrencies and other virtual assets;
- Applicable sanctions:
- Accessory penalties applicable to natural persons (i) prohibition from exercising office; (ii) suspension from exercising office; (iii) expulsion from national territory (in the case of foreign citizens);
- Entry into force: date of publication.
1 A cryptocurrency is a digital currency designed to function as a medium of exchange through a computer network that doesn't depend on any central authority, such as a government or a bank, to defend or maintain it.
2 The numbering of the law contains an apparent error in the indication of the articles relating to penalties applicable to legal persons, which has not yet been rectified. The error causes uncertainty and could lead to an argument that there is no enabling law to apply the penalty to legal persons.
