The number of crypto companies in Estonia has decreased significantly due to changes in regulatory laws. Recently, the country’s Money Laundering Regulatory Authority issued, The Estonian Financial Intelligence Unit (FIU) was issued, It introduced strict regulations that led to the voluntary closure of many crypto companies.
The regulator has also revoked some licenses from VASPs. The outcome of this move is not yet known, but it will lead to the cryptocurrency companies being liquidated from the country.
Estonia has implemented new cryptocurrency regulations
Financial Intelligence Unit released Statement on the impact of the amendments to certain regulatory laws in March 2023. The amendment includes Anti-Money Laundering (AML) and the Prevention of Terrorist Financing laws.
According to the statement, around 200 local crypto service providers have closed down voluntarily since March 15th. The enforcement of the laws also led to the revocation of the operating licenses of nearly 200 companies.
Notably, the Estonian government has tightened the scope of compliance expected for Virtual Asset Service Providers (VASPs) through the laws. Expanded rules include increased licensing fees and capital and information reporting requirements. Crypto companies were expected to maintain huge reserves of capital and legitimate links with Estonia.
The amendment also introduced the rule for the Financial Action Task Force to travel and the Financial Intelligence Unit is responsible for implementing the laws.
Estonia is one of the countries in the world that is very focused on creating a consistent and robust regulatory regime for cryptocurrencies. Its endeavor to maintain effective anti-money laundering rules has been around for several years.
Enthusiasm intensified after discovering the country About $235 billion The value of the capital was laundered in 2018. The illegal deal involved Danske Bank, which is the Estonian branch of the Danish megabank.
Why did the Estonian regulator revoke VASP licenses
In a recent statement, FIU Director Mattis Meeker stated that they had stumbled across horrific situations during license renewals of some crypto companies. He pointed out that some suspicious situations indicate links to illegal activities by some companies.
Majority of them have problems with misleading information about the company. Some boardroom executives lack proper knowledge, while some have fraudulent credentials. Also, some companies have registered people as members of the board of directors without the individuals knowing about these positions.
The regulator also saw several identical documents between the companies. This means that they copy and paste the same business plans from one another, or they use the same legal and professional services entities.
According to the director, this evidence came from requests from some VASP service providers who had lost their licenses. Meanwhile, data from FIU revealed that as of May 1, around 100 active cryptocurrency companies were registered in Estonia.
Featured image from Wikipedia and chart from Tradingview.com
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