New law pushes around 400 crypto firms out of Estonia
The number of registered cryptocurrency companies in Estonia has dropped by 80% after enacting a new law to prevent money laundering.
The country’s money laundering regulator, the Financial Intelligence Unit, report 389 certifications have expired, indicating that there are only 100 active certifications for virtual asset service providers.
A controversial law is the Anti-Money Laundering and Terrorist Financing Act. The amendments to the law entered into force on March 15, 2022.
Since then, 200 domestic cryptocurrency companies have voluntarily waived their license. The FIU also canceled 189 for not complying with the requirements of the revised law.
Matis Mäeker, director of the Financial Intelligence Unit, said the documents filed by the unlicensed companies “demonstrate the legislator’s responsiveness to the legislative amendment and the pre- and post-amendment supervisory activity was adequate.” said. ”
Estonia is one of the friendliest countries for tech startups, including cryptocurrency companies. However, it also faces reputational risks from money laundering scandals and cryptocurrency fraud.
In an effort to restore its reputation, the company tightened money laundering laws, requiring cryptocurrency companies to reapply for licenses. The regulator claimed it “saw a situation that would surprise all supervisors” in renewing its license.
These include identical business plans by applicants, board members who were unaware of their appointments, falsified resumes, and other issues. In addition, many companies have submitted their applications using the same laws or corporate service providers.
Regulators will continue to review authorizations, but expect a return to “normality in terms of supervision.”
The article first appeared on CryptoSlate, claiming that around 400 cryptocurrency companies have been kicked out of Estonia due to a new law.