Estonia clarifies upcoming regulations, forbids holding or trading crypto - regulation

The Estonian government has passed a law that is tailored to the improvement of the supervision of its crypto sector, which quickly expanded due to the favorable regulations and the business climate. The new law that still has to be adopted will place stricter requirements for service providers without preventing their customers from owning or exchanging cryptocurrencies.

authorities in Tallinn design stricter rules for crypto service providers

Executive power in Estonia has prepared and adopted a draft law that aims to "regulate virtual asset service providers (vasps) more effectively". The main goal, the Ministry of Finance explained on Sunday, be it to reduce the risk of financial crime due to the crypto platforms registered and operated in the Baltic States.

The new regulations that are presented to the Estonian parliament in the form of a revised draft law require vasps to identify their customers in such a way that they are associated with their transactions. The regulations expand the prohibition of opening anonymous virtual accounts in 2020 after Estonia's crypto -friendly regulations attracted numerous license applicants.

The Ministry of Finance pointed out that the legislation has no effect on people who have the virtual currency via a private wallet that is not provided by a VASP. It does not forbid customers to keep and act virtual assets, and do not require them to share the private keys for their crypto wallets. At the same time, Estonian service providers are not allowed to offer anonymous accounts or wallets.

The Ministry emphasized that the measures are similar to the rules for payment and bank traffic. With the changes, the recommendations of the Financial Action Task Force on Money Laundering (FATF) are implemented in Estonian law. These define some virtual asset services that are not defined in current Estonian legislation.

ESTland increases capital requirements for crypto licensees

An important aspect of the new regulation is the requirement to operate Estonia or being connected to Estonia in order to maintain its licenses. The boom in the applications was largely due to the applicable regulations that allow the resale of companies licensed to Estonia to third parties. The supervision of such companies has proven to be unexpiable, and the authorities found that the Financial Intelligence Unit of the country according to the new regulations ( fiu ) can reject such applications.

In addition, the supervisory authorities will raise the investment requirements for vasps depending on the type of services from € 12,000 to € 125,000 or € 350,000. The Estonian government hopes that the threshold will reduce the number of resting facilities. The average annual turnover of the licensed vasps is now around 80 million euros, the Ministry of Finance said.

Estonia announced in October that it was working on the new legislation when the head of the FIU, Matis Mäeker, uncovered In an interview that only every tenth licensed crypto company has a bank account in the country, and added that the regulatory authority is considering revoking all the previously issued licenses in order to resume authorization. At that point, the agency revoke around 2,000 licenses of virtual asset service provider and Wallet operator.

lubomir Taskensev

lubomir Taskersev is a technically experienced journalist from Eastern Europe, who likes Hitchens' quote: "To be a writer is what I am and not what I do." In addition to crypto, blockchain and fintech, international politics and business are two other sources of inspiration.

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