Compliance crackdown: Estonia revokes nearly 400 crypto licenses
Following the implementation of stricter rules, almost 400 crypto firms have either lost or forfeited their Estonian licenses. The Baltic nation’s Financial Intelligence Unit (FIU) has revealed that only 100 businesses can provide digital asset services.
Expired licenses and stricter requirements
The Estonian government has seen a total of 389 licenses for virtual asset service providers expire. As of May 1, 2023, only 100 active authorizations remain, according to the FIU on Monday. It is essential to know that Estonia initially attracted hundreds of crypto firms with its business-friendly climate before deciding to tighten regulations for the industry. The new amendments to the Money Laundering and Terrorist Financing Prevention Act, which took effect in March 2022, include higher capital requirements for wallet, exchange, and custody platforms.
The licenses were either canceled by the FIU or at the request of the holders. Also, the FIU noted that since the stricter requirements came into force, service providers have abandoned nearly 200 authorizations, and the FIU has revoked almost the same number due to non-compliance.
Surprising situations in renewing authorizations
FIU Director Matis Mäeker highlighted some surprising situations encountered during the renewal of authorizations. The FIU identified individuals unaware of their appointments to managerial positions and those with false professional resumes. Several companies also submitted identical business plans, while others had no connection to Estonia, violating another new requirement. Many of these platforms’ applications were submitted by the same legal firms.
Mäeker stated that the numerous suspicious circumstances in the applications raised questions about the companies’ credibility and actual intentions to provide services in Estonia. In addition, he further suggested that some individuals may use the Estonian economic and financial system for illegal activities.
The FIU has emphasized its commitment to an ongoing review of authorizations and supervision in the area of money laundering and terrorist financing prevention. This approach will help identify certain deficiencies. When Mäeker took over as the FIU’s head in the summer of 2021, Estonia had almost 650 licensed crypto service providers.
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Compliance crackdown: Estonia revokes nearly 400 crypto licenses
Following the implementation of stricter rules, almost 400 crypto firms have either lost or forfeited their Estonian licenses. The Baltic nation’s Financial Intelligence Unit (FIU) has revealed that only 100 businesses can provide digital asset services.
Expired licenses and stricter requirements
The Estonian government has seen a total of 389 licenses for virtual asset service providers expire. As of May 1, 2023, only 100 active authorizations remain, according to the FIU on Monday. It is essential to know that Estonia initially attracted hundreds of crypto firms with its business-friendly climate before deciding to tighten regulations for the industry. The new amendments to the Money Laundering and Terrorist Financing Prevention Act, which took effect in March 2022, include higher capital requirements for wallet, exchange, and custody platforms.
The licenses were either canceled by the FIU or at the request of the holders. Also, the FIU noted that since the stricter requirements came into force, service providers have abandoned nearly 200 authorizations, and the FIU has revoked almost the same number due to non-compliance.
Surprising situations in renewing authorizations
FIU Director Matis Mäeker highlighted some surprising situations encountered during the renewal of authorizations. The FIU identified individuals unaware of their appointments to managerial positions and those with false professional resumes. Several companies also submitted identical business plans, while others had no connection to Estonia, violating another new requirement. Many of these platforms’ applications were submitted by the same legal firms.
Mäeker stated that the numerous suspicious circumstances in the applications raised questions about the companies’ credibility and actual intentions to provide services in Estonia. In addition, he further suggested that some individuals may use the Estonian economic and financial system for illegal activities.
The FIU has emphasized its commitment to an ongoing review of authorizations and supervision in the area of money laundering and terrorist financing prevention. This approach will help identify certain deficiencies. When Mäeker took over as the FIU’s head in the summer of 2021, Estonia had almost 650 licensed crypto service providers.
Read More
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