2024-03-22
The Estonian government has approved a bill regulating cryptocurrency service providers, according to state media reports.
Under the law the provider will be regulated by the Financial Supervisory Authority (FSA). Currently, cryptocurrency service providers are registered with the Financial Supervisory Authority (FIU) and must comply with anti-money laundering (AML) regulations.
The FSA will start issuing licenses in 2025 and Financial Intelligence Unit licensees will need to apply for an FSA license by the end of that year. Estonian Finance Minister Mart Võrklaev said:
"I believe that anyone who takes this issue seriously and wants to provide services can obtain a new license from the Financial Supervisory Authority."
Under the law AML regulations violators maximum fine is 40,000 euros (US$43,450). Under the new law, a fine of up to 5 million euros ($5.2 million) is possible.
Võrklaev announced that he submitted the bill, which has not yet been translated into English, to the government last week.
The bill must be approved by the government before it can be voted on in Estonia's unicameral parliament, the Riigikogu Bill will bring Estonia into compliance with the EU's Investment in Crypto-Assets (MiCA) rules.
It will also change the security prospectus requirements. In the past, companies looking to raise capital in the form of shares or bonds worth more than €5 million were required to prepare a detailed offer – a slow and expensive process – but now the threshold will be raised to €8 million.
Estonia positioned itself as a cryptocurrency country by passing a law in 2017 that provides crypto companies with good regulations and easy registration, including an e-address.
In 2020, the government cracked down on cryptocurrency companies after a major scandal that had nothing to do with cryptocurrencies broke out in the country.
Estonia canceled the licenses of 500 cryptocurrency companies issued by the Ministry of Finance in 2020 after their failure in the country within six months of registration. Following months of police scrutiny, the number of licensed cryptocurrency companies in Estonia dropped from 1,234 at the end of 2019 to 353 in September 2020.
In October 2021, the Ministry of Finance decided to revoke the licenses of all cryptocurrency companies and reorganize their business. licenses.
In 2021, it implemented stricter anti-money laundering laws. After the law was changed in 2023, nearly 400 virtual asset providers were closed or voluntarily closed.
