Upcoming AML Regulations in Estonia to Affect Cryptocurrency Industry – Regulation Bitcoin News


Estonia is preparing to enforce a set of new anti-money laundering rules that will toughen requirements for cryptocurrency companies operating under an Estonian license. The changes come amid concerns that Russia may use crypto to evade Western sanctions and an ongoing audit of the Baltic nation’s AML policies.

Estonian Government Creates Tighter Regulatory Environment for Crypto Firms

Estonia, whose banking sector has in the past been implicated in processing billions for suspicious Russian clients, is now taking steps to close loopholes that could allow Russia, its elites and its ally Belarus to evade sanctions imposed for the invasion. from Ukraine.

The country’s amended Money Laundering and Terrorist Financing Prevention Law, which introduces strict standards, will take effect next Tuesday. Crypto firms will bear the brunt of Estonia’s war on dirty money, Politico notes in a report.

The update will make Estonia’s regulatory regime for platforms dealing with digital assets even stricter than the upcoming EU rules. The framework adopted in 2017 was considered too flexible, as it allowed hundreds of companies, many of them based elsewhere, to obtain licenses from Estonia.

Speaking to the publication, Finance Minister Keit Pentus-Rosimannus insisted that Estonia welcomes innovation, but stressed that it will not tolerate financial crime and will keep preventing money laundering as a priority. He further commented:

Supervision was simply not possible. But the risk was ours because they operated under an Estonian license. That was something that changed with the law.

Estonian authorities intend to make it difficult for companies to join their crypto space. Entities offering digital wallet and online exchange services will need to meet a minimum capital requirement of EUR100,000 ($109,000) and those providing custody services will need to show at least EUR250,000.

The new legislation will also introduce higher registration fees, more stringent due diligence obligations, and more rigorous regulatory scrutiny. In addition, cryptocurrency companies will be required to maintain a presence in the country, unlike before.

Tallinn is tightening oversight of cryptocurrencies amid an ongoing audit of the country’s safeguards against illicit financial flows by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering and Crime Financing Measures. Terrorism (moneyval).

The auditors, who will wrap up their work in December, are examining digital asset regulations, among other policies. The stakes are high for Estonia as the Baltic nation may end up in a “gray list”, along with Malta, another small EU member state that tried to become a crypto-friendly destination.

The Estonian government is tightening its approach even though policymakers in Brussels are still considering EU markets in crypto assets (Mica) proposal. Furthermore, European standards are expected to be less stringent than the new Estonian regulations. Capital requirements for crypto service providers, as proposed by the European Commission, range from €50,000 to €150,000.

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ACT, crypto, crypto regulations, CRYPTOCURRENCIES, cryptocurrency, digital resources, Estonia, Estonian, structure, Law, Legislation, License, licenses, License, Money laundering, proposal, Regulation, rules

Do you expect many cryptocurrency businesses to move out of Estonia after the country implements its stricter regulations? Tell us in the comments section below.

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Lubomir Tassev

Lubomir Tassev is a tech-savvy Eastern European journalist who likes Hitchens’s quote: “Being a writer is who I am, rather than what I do.” In addition to crypto, blockchain, and fintech, international politics and economics are two other sources of inspiration.




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