Estonia Introduces New Law That Makes 80% Of Crypto Companies Disappear

Key Points:

• Estonia has reduced the number of registered crypto companies by 80% after enacting a new regulation to combat money laundering.
• The corporations themselves revoked almost 200 licenses.
• The Money Laundering and Terrorism Financing Prevention Act is contentious legislation.

According to the report issued on Monday by the country’s money-laundering agency, contentious crypto legislation has cut the number of registered enterprises in Estonia by roughly 80%.

Over 200 licenses were revoked by the enterprises themselves, and a similar number were denied by the country’s Financial Intelligence Unit, which has been tasked with enforcing a 2022 rule requiring corporations to maintain substantial cash reserves and actual ties to Estonia.

According to a study issued by the country’s money laundering authority, the Financial Intelligence Unit (FIU), the validity of 389 authorizations has expired, and there are just 100 current authorizations for virtual asset service providers.

The Money Laundering and Terrorism Financing Prevention Act is contentious legislation. The law’s amendments went into effect on March 15, 2022.

Individuals were assigned to management boards without their knowledge or with fraudulent qualifications, according to applications. According to the FIU, documentation was often similar amongst multiple corporations since many of them had employed the same cluster of legal and professional service firms.

Estonia, home of digital unicorns such as Wise, Bolt, and Skype, has also worked to rehabilitate its image after a scandal involving the laundering of Russian cash via the Tallinn branch of Danske Bank.

Being a member of the European Union, the nation will soon be required to apply the bloc’s Markets in Crypto Assets law, which would necessitate the licensing of wallet providers and exchanges.

The documents submitted by firms that lost their authorization show that the legislator’s response with regard to the amendments to the Act, and the supervision activities both before and after the amendments, have been relevant, according to Matis Mäeker, Director of the FIU.

In order to rebuild its image, the FIU has strengthened its money laundering regulations and made it mandatory for cryptocurrency enterprises to reapply for licensing. While renewing authorizations, the regulator stated it saw instances that would startle any supervisor.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Harold

Coincu News