In 2017, Estonia became amongst the first countries in Europe to provide a legal framework for business activities involving virtual currencies. Since then, the Baltic country has emerged as a preferred destination for crypto entrepreneurs to launch their businesses.
In a space of three years, Estonia licensed more than 1,400 entities, but as part of a crackdown on financial crime, regulators recently stripped more than 500 of their permits this year, Bloomberg reported in June.
So far, the crackdown has targeted companies that failed to start operations in Estonia within six months of getting a permit, Madis Reimand, who heads Estonia’s Financial Intelligence Unit (FIU), told the media outlet.
He added that more than a half of the remaining 900 crypto companies are now at risk of losing their licenses as they have no operations in Estonia and their managers are outside the country.
Number of cryptoassets licenses issued by Estonia, Graphic source: Bloomberg, June 2020
Last year, the Estonian parliament approved stricter licensing rules for crypto businesses after warnings from supervisors about rising fraud risks.
The new rules, which came into force on March 10, 2020, include an extended application processing time from 30 days to up to 120 days, an increased license fee of EUR 3,300, from EUR 345 previously, as well as know your customer/anti-money laundering (KYC/AML) compliance requirements.…
