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:
Prohibited activity | Natural Persons | Legal Persons2 |
| Possession of computer equipment, communications and infrastructure intended or used for mining cryptocurrencies and other virtual assets | Prison sentence of 1 to 5 years | Fine of 150 to 450 times the licence fee or dissolution, depending on the seriousness of the facts |
| Cryptocurrency mining, by yourself or through an intermediary | Prison sentence of 3 to 12 years (attempt is punishable under the Penal Code) | Fine of 150 to 450 times the licence fee or dissolution, depending on the seriousness of the facts |
| Use of any electrical installations licence for the purpose of mining cryptocurrencies and other virtual assets | Prison sentence of 3 to 8 years (attempt is punishable under the Penal Code) | Fine of 150 to 450 times the licence fee or dissolution, depending on the seriousness of the facts |
| Connection of cryptocurrency mining equipment and other virtual assets to the National Electricity System | Prison sentence of 3 to 12 years (attempt is punishable under the Penal Code) | Fine of between 30 and 50 times the estimated value of the monthly energy consumption of the corresponding installation, physical unit, system or equipment, or dissolution, depending on the seriousness of the facts. |
- 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.
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