Virtual currencies are generally not considered to be legal currencies in Norway, as they fall outside the usual definition of money or currency. Moreover, there is no specific virtual currency legislation in Norway with respect to securities and investment laws, banking and money transmission, or the regulation of exchanges, miners, issuers or sponsors. Hence, businesses or persons operating or conducting virtual currency activities are not required to be licensed under the applicable financial services legislation.

On 15 October 2018, Norway implemented a new Anti-Money Laundering Act and a related regulation that expanded the scope of the legislation to apply for providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers (CWPs). Based on recent case law, banks may have justifiable grounds for refusing to perform payment services (by opening bank accounts, etc.) due to virtual currencies' high risk of being used for money laundering.

For tax purposes, virtual currencies are considered as assets, and thus are subject to capital gains tax.


i Overview

There are no specific securities and investment laws in Norway with respect to virtual currencies or the offering of such currencies.

On 20 November 2017, the Financial Supervisory Authority of Norway warned investors and firms about initial coin offerings (ICOs) because of the high risks of investment losses, fraud and money laundering.2 Depending on its structure, an ICO may fall outside of the scope of applicable laws and regulations, in which case investors cannot benefit from the protection that these laws and regulations provide. Firms involved in ICOs should, according to the Financial Supervisory Authority, give careful consideration as to whether their activities constitute regulated activities or not. Moreover, the Financial Supervisory Authority has referred to ESMA's two statements on 13 November 2017 relating to the risk of ICOs for investors3 and rules applicable to firms involved in ICOs,4 and has declared that its supervisory activities will be based on ESMA's assessments.

In the statement on the rules applicable to firms involved in ICOs, ESMA alerts firms involved in ICOs of the need to meet the relevant regulatory requirements, including considering whether their activities constitute regulated activities. It is the duty of firms themselves to consider the regulatory framework, seeking the necessary permissions and meeting the applicable requirements. Based on the Financial Supervisory Authority's statement, similar requirements will be applicable for such activities in Norway.

On this basis, the structure of ICOs will determine whether they fall outside the scope of the applicable rules. Where coins or tokens qualify as financial instruments it is, according to ESMA, likely that firms involved in ICOs are conducting regulated investment activities, such as placing, dealing in or advising on financial instruments, or managing or marketing collective investment schemes. They may also be involved in offering transferable securities to the public.

Because of the EEA Agreement, Norway will at the outset have similar requirements as those under the applicable EU legislation. The lack of a full Norwegian EU membership implies, however, that the Norwegian legislation from time to time may differ from EU legislation, typically where Norway has yet to implement EU legislation into Norwegian law.

Below is a high-level summary of the applicable EU legislation that also applies in Norway.

ii The Prospectus Directive

The Prospectus Directive is a key piece of applicable EU legislation that also may be relevant for ICOs in Norway. It aims to ensure that adequate information is provided to investors from issuers raising money in the Norwegian market. Issuers may thus be required to publish a prospectus, subject to approval by a competent authority, before an offer of transferable securities to the public, or the admission to trading of such securities on a regulated marked situated or operating within an EU or EEA Member State occurs, unless certain exclusions or exemptions apply.

The current applicable rules in Norway with respect to prospectus regulations are the Norwegian Securities Trading Act, which implemented the Prospectus Directive, as amended.5

Virtual currencies generally do not qualify as transferable securities, and the prospectus requirements are generally not applicable for ICOs and similar offerings of virtual currencies.

iii The Markets in Financial Instruments Directive

Rules similar to those under the Markets in Financial Instruments Directive (MiFID, as later amended through MiFID II) are implemented into Norwegian laws and regulations.6 These rules aim to create a single market for investment services and activities, and to ensure a high degree of harmonised protection for investors in financial instruments. As described by ESMA in the statement regarding rules applicable to firms involved in ICOs, an investment firm that provides investment services in relation to financial instruments must comply with the applicable requirements. Where a coin or token qualifies as a financial instrument in the case of an ICO, the process by which the coin or token is created, distributed or traded is assumed likely to involve activities subject to the rules in MiFID II, such as placing, dealing in or advising on financial instruments. Depending on the services provided, organisational requirements, conduct of business rules and transparency requirements may apply. Similar requirements will apply in Norway in such cases.

iv Alternative Investment Fund Managers Directive

Rules similar to those under the Alternative Investment Fund Managers Directive are implemented into Norwegian law and regulations,7 and set out rules for authorisation, ongoing operation, and the transparency of managers that manage or market alternative investment funds. Virtual currencies normally fall shy of the alternative investment fund managers legislation, but alternative investment funds that invest in virtual currencies can fall within the said legislation, depending on, inter alia, their structure.


Virtual currencies fall outside the scope of the usual definitions of money or currency in Norway, and will thus not be considered as a legal currency in Norway.

Virtual currency activities furthermore fall outside the scope of the Norwegian Financial Undertakings Act. Thus, activities related to virtual currencies are in general not considered as activities requiring a banking licence or a licence as a payment services provider.8


i Implementation of a new Anti-Money Laundering Act and a related regulation

On 15 October 2018, a new Anti-Money Laundering Act and a related regulation entered into force in Norway.9 The new legislation implemented the EU's fourth Anti-Money Laundering Directive and advanced the implementation of certain provisions set out in Directive (EU) 2018/843 (amending EU's fourth Anti-Money Laundering Directive),10 and replaced the Anti-Money Laundering Act of 2009 (which implemented EU's Third Anti-Money Laundering Directive).11

The new anti-money laundering legislation has, compared to the previous Anti-Money Laundering Act of 2009, expanded the scope to apply for providers engaged in exchange services between virtual currencies and fiat currencies, and wallet CWPs, as such providers now are considered as obliged entities. Activities relating to virtual currencies fell outside the scope Anti-Money Laundering Act of 2009, including activities relating to exchanges, mining and storage services for virtual currencies. Thus, the new legislation requires providers engaged in exchange services between virtual currencies and fiat currencies and CWPs to comply with mandatory anti-money laundering obligations, including conducting customer due diligence measures.

The Financial Supervisory Authority will supervise providers engaged in exchange services between virtual currencies and fiat currencies, and ensure that CWPs comply with the applicable anti-money laundering legislation. Providers conducting such activity in Norway are obliged to register with the Financial Supervisory Authority, including information about their name, organisational structure, registration number, offered service as well as information about the general manager or person in a similar position, members of the board of directors and any contact persons.

ii Case law

Under Norwegian law, a bank has a general duty to contract, unless it has justifiable grounds to refuse by terminating a customer relationship or to refuse the establishment of a customer relationship. Pursuant to a judgment of 30 April 2018 from Oslo District Court between a Nordic bank and a Norwegian investor12 (with a business idea to incorporate a Norwegian virtual currency exchange firm13), a bank may refuse to perform payment services (by opening bank accounts) due to virtual currencies' high risk of being used for money laundering.

In this case the Court ruled, after an overall assessment, that the risk of money laundering and transactions related to criminal offences was clearly elevated by Bitcoin trade, although Bitcoin trading may also be done under legitimate conditions. The Court found it clear that this risk constituted justifiable grounds for the bank to refuse its customer relationship pursuant to the Norwegian financial contracts act. The Court also referred to a bank's duty to terminate customer relationships if they entail risks for transactions in connection with criminal offences pursuant to the Norwegian Anti-Money Laundering Act.


There is currently no specific regulation on virtual currency exchanges in Norway. Thus, operating such exchanges does not require a financial services regulation or a licence to operate an exchange or a regulated market. The aforementioned apply both to decentralised exchanges with peer-to-peer solutions and to centralised exchanges. They are, however, required to register with the Financial Supervisory Authority in order to comply with its anti-money laundering obligations.

On 12 February 2018, the Financial Supervisory Authority14 joined the warnings of the European supervisory authorities (ESMA, EBA and EIOPA)15 to consumers of the high risk related to investing in virtual currencies such as Bitcoin, Ether and Ripple. As virtual currencies are not regulated, are traded on unregulated marketplaces and lack transparency in pricing, the Financial Supervisory Authority considers virtual currencies unsuitable for short and long-term savings for most consumers.

Exchanges for buying and selling virtual currencies exist in Norway.16 From publicly available information, it is also expected that virtual currency exchanges may be launched in Norway in the near future.


There is no specific regulation of miners of virtual currencies; nor are there any specific licence requirements. General rules for conducting business activities will apply to miners of virtual currencies as well.


There are no specific laws or regulations that apply to issuers or sponsors of virtual currencies in Norway. Issuing or sponsoring a virtual currency is generally considered to be a legal activity in Norway, but they do not require any licence pursuant to financial regulation legislation.


There are no specific criminal and civil fraud and enforcement rules with respect to virtual currencies in Norway.

A 'pump-and-dump' scheme, that is, talking up the price of an asset before dumping it for a profit at the expense of investors, is an old type of market fraud. Compared to a stock exchange, virtual currency exchanges are unregulated markets, which may mean that such pump-and-dump schemes may be carried out with impunity. There have, however, not been many examples of such schemes in Norway, which may be due to the relatively low numbers of completed ICOs.

General criminal and civil fraud and enforcement legislation may be applicable to fraudulent ICOs, although no specific rules exist with respect to virtual currency. The same applies for fake wallets, and pyramid or Ponzi schemes.

ix TAX

i Overview

Norwegian tax authorities consider virtual currencies as assets being subject to the general tax rules for wealth and sales taxes, but virtual currency transactions are not subject to value added tax (VAT).17

ii Wealth and sales taxes

For private individuals, capital gains from virtual currencies are taxable income and losses are deductible.18 This applies to both mining and transactions. The current tax rate, which is determined annually, constitutes 23 per cent in 2018.19

Virtual currencies are considered as assets of economic value, and shall thus be included in the calculation basis of net wealth for personal taxpayers, calculated as the total value as at 1 January of the tax assessment year.20 This applies for all virtual currencies held by Norwegian tax residents, regardless of the location of the assets (i.e., inside or outside of Norway).

For corporate taxpayers, taxable income shall include any benefit gained from work, assets or business activities.21 Relevant conditions to determine whether an activity constitutes a business activity are its duration, extent, profitability, expense and risk.22 Trading of virtual currencies may be considered as a business activity if such trade is conducted regularly and a significant number of transactions are carried out.23 Mining may be considered a business activity if it is carried out regularly and has a certain extent.24

iii VAT

The Norwegian tax authorities altered their VAT guidelines in 2017 and virtual currency transactions are not subject to VAT as exempt financial services.25 Previously, the tax authorities assumed that the exchange of virtual currencies was not covered by the VAT exemption for financial services and therefore constituted taxable services.26 Following a decision of the European Court of Justice on 22 October 2015,27 which ruled the corresponding service as exempted from VAT in the European Union, the Norwegian tax authorities reassessed the treatment of VAT, and in 2017 concluded that the services of exchanging Bitcoins were covered by the exemption for financial services.28

The Norwegian tax authorities assessed in a guideline in 2018 that mining of virtual currencies falls under the VAT exemption for financial services.29 However, businesses that only convert data power for others for mining of virtual currency are subject to VAT.

The sale of remotely deliverable services to foreign registered businesses is zero-rated, which means that the services are still VAT-taxable but that the rate of VAT is zero per cent. It is the nature of the service, that is, whether it is possible to remote deliver the type of service, which determines whether it falls under the provision. Whether the service actually is associated with a location is not essential. According to an advance ruling from the Norwegian tax administration, data centre services are remotely deliverable, even though they may appear to be attached to a specific location in Norway, the datacentre.

iv Tax for ICOs

Regarding how to handle tax and VAT for ICOs, the Norwegian tax authorities have expressed in guidelines that these matters must be assessed on a case-by-case basis, including whether the VAT exemption for financial services applies.30

v Electrical power tax

An electrical power tax is levied on all electric power suppliers in Norway, including for power supplied free of charge, and power distribution companies or generators used for internal purposes. Enterprises that transmit electrical power to consumers or generate electrical power must register as being liable for such tax. The liability to pay the tax arises upon the supply of electrical power to consumers and upon consumption for internal use.

There are two relevant tax rates that are determined annually by the Parliament: a normal tax rate and a reduced tax rate. The normal tax rate for 2018 constitutes 0.1658 Norwegian kroner per kWh, while the reduced tax rate constitutes 0.0048 Norwegian kroner per kWh.31

A normal tax rate applies, inter alia, to power supplied to households, non-industrial commercial activities and administrative buildings in the industrial manufacturing sector. A reduced tax rate applies, inter alia, to electrical power that is supplied to data centres with an output in excess of 0.5 MW.32 For a data centre to get a reduced rate, it must have the storage and processing of data as its main business activity. The Norwegian tax administration assessed in a guideline published on 9 August 2018 that data centres that are mining virtual currencies may benefit from the reduced tax rate.33 At the time of writing, there is, however, a political debate in Norway regarding whether it is desirable to continue with a reduced tax rate for data centres that are mining virtual currencies.

Data centres that have a support function to an enterprise's main business (e.g., financial services) are excluded from the provision of a reduced tax rate.34 The reduced rate is limited to power used for servers, cooling systems, pumps, lighting, safety devices, aggregates and devices that directly support a server's function.


i Overview

There are currently no specific licence requirements for virtual currency exchanges; nor are there any specific securities and investment laws, or any specific regulation of miners, issuers and sponsors. The current Norwegian financial regulation legislation must as a main rule be amended in order for virtual currency activities to fall inside its scope. Such amendments are generally not expected in the near future, but it is expected that Norwegian authorities will cooperate with countries participating in the European blockchain partnership if such regulation shall become implemented into Norwegian law at some point.

ii European blockchain partnership

Twenty-three European countries, including Norway, have signed a declaration on the establishment of a European blockchain partnership in order to share experiences of and expertise in technical and regulatory fields, and to prepare for the launch of EU-wide blockchain applications across the digital single market.35 Based on this partnership and the existing partnership under the EEA Agreement, we expect that the Norwegian authorities will cooperate with the other participating countries in regulating virtual currencies going forward.

iii Central bank digital currency

On 18 May 2018, the Norwegian Central Bank published a working group paper with an overview of issues that it regards as relevant in an assessment of whether to introduce a central bank digital currency (CBDC) in Norway.36

Introducing a CBDC would entail offering a digital liability on the Central Bank for use as a means of payment and a store of value, and would entail the creation of dedicated payment solutions the Central Bank would have full or partial responsibility for, but that it would not necessarily operating and maintain. Any decision of the Central Bank to take the initiative in introducing a CBDC must, according to the working group, be based on a socioeconomic cost–benefit analysis. Important elements in such an analysis will be the impacts on the payment system, financial stability and monetary policy.

In the working group's assessment, there are primarily two relevant models for organising a CBDC system. The first is an account-based model in which both value storage and transaction processing are centralised. In such model, money is held in accounts and moves from one account to another in the system. The working group sees this model as an advantageous back-up solution. The second model is a value-based model in which value storage and processing are decentralised. In this model, money will be stored locally in payment instruments, typically a card or another instrument being issued by a central third party. The working group sees this model as an advantageous, real, risk-free alternative to depositing money to store values. Hybrid variants that combine elements of both the models, such as a model based on distributed ledger technology, may also be a potential third alternative.

Introducing a CBDC may require certain changes in the central bank act. An account-based solution may require amending provisions in the central bank act, under which entities may hold an account with the Central Bank. A value-based solution probably will not require any amendments as long as the solution is within the customary normal remit of the Central Bank.

The working group has expressed that the project's second phase will be to examine the purposes of a CBDC and the most relevant solutions in greater detail. This will make it possible to elaborate on the impacts of a CBDC and the cost–benefit analysis.


1 Klaus Henrik Wiese-Hansen is a partner and Vegard André Fiskerstrand is an associate at Schjødt.

2 Financial Supervisory Authority of Norway (2018) ICOs – warning investors and firms (source: https://www.finanstilsynet.no/markedsadvarsler/2017/initial-coin-offerings-icoer---advarsel-til-investorer-og-foretak/).

3 ESMA (2017) statement on risk of ICOs for investors (source: https://www.esma.europa.eu/sites/default/files/library/esma50-157-829_ico_statement_investors.pdf).

4 ESMA (2017) statement on rules applicable to firms involved in ICOs (source: https://www.esma.europa.eu/sites/default/files/library/esma50-157-828_ico_statement_firms.pdf).

5 The Securities Trading Act of 29 June 2007 No. 75 implementing Directive 2003/71/EC (as amended).

6 The Securities Trading Act of 29 June 2007 No. 75 and regulation of 4 December 2017 No. 1913.

7 The Alternative Investment Fund Managers Act of 20 June 2014 No. 28 and the alternative investment fund managers regulation of 26 June 2016 No. 877.

8 The Norwegian Financial Undertakings Act of 10 April 2015 No. 17.

9 The Anti-Money Laundering Act of 23 June 2018 No. 23, the Anti-Money Laundering Regulation of 14 September 2018 No. 1324.

10 Directive 2015/849/EC, Directive (EU) 2018/843.

11 The Anti-Money Laundering Act of 11 June 2009 No. 11, Directive (EU) 2005/60/EC.

12 Nordea Bank AB (publ), Norsk filial v. Sunde Bitmynthandel.

13 Bitmynt AS.

14 Financial Supervisory Authority of Norway (2018) warns consumers about virtual currencies (source: https://www.finanstilsynet.no/nyhetsarkiv/nyheter/2018/finanstilsynet-advarer-forbrukere-om-kryptovaluta/).

15 EBA (2017) warns consumers about virtual currencies (source: https://www.eba.europa.eu/-/esas-warn-consumers-of-risks-in-buying-virtual-currencies).

16 For example, Coinbase (source: https://www.coinbase.com/places/norway) and Bitnorex (source: http://www.bitnorex.no/).

18 Cf. Norwegian tax act of 26 March 1999 No. 14 §§ 5-1 (2) and 6-2 (1).

19 Norwegian Parliament tax resolution of 12 December 2017 No. 2183.

20 Norwegian Tax Administration, tax and VAT treatment of virtual currencies.

21 Cf. Norwegian tax act of 26 March 1999 No. 14 §§ 5-1 (1) and 6-2 (1).

23 Norwegian Tax Administration, tax and VAT treatment of virtual currencies.

24 Norwegian Tax Administration, tax and VAT treatment of virtual currencies.

25 Norwegian Ministry of Finance (2017) Bitcoin exempted from VAT (source: https://www.regjeringen.no/no/aktuelt/bitcoin-er-unntatt-fra-merverdiavgift/id2538128/).

27 Case C-264/14.

28 Norwegian Ministry of Finance (2017), VAT exemption for financial services (source: https://www.regjeringen.no/no/dokumenter/merverdiavgift---unntaket-for-finansielle-tjenester/id2538129/).

29 Norwegian Tax Administration (2017), VAT mining of virtual currency (source: https://www.skatteetaten.no/contentassets/ed1de52af7cc45989a5338780159ad6f/kryptovaluta.pdf).

31 Regulation of 12 December 2017 No. 2190 § 1, cf. special duty act of 19 May 1933 No. 11.

32 Regulation of 11 December 2001 No. 1451 § 3-12-6.

33 Norwegian Tax Administration (2018), opinion on electrical power tax for data centres and mining of virtual currency (source: https://www.skatteetaten.no/rettskilder/type/uttalelser/prinsipputtalelser/tolkningsuttalelse-elektrisk-kraft-datasentre-kryptovaluta/).

34 Norwegian Tax Inspectorate (2018), Tax on electric power tax (source: https://www.skatteetaten.no/globalassets/rettskilder/avgiftsrundskriv/2018-elektrisk-kraft.pdf).

35 European Commission (2018), European countries join blockchain partnerships (source: https://ec.europa.eu/digital-single-market/en/news/european-countries-join-blockchain-partnership).