Estonian regulator wants to revoke all crypto exchange licenses

Financial regulators in the Baltic state of Estonia want to revoke all cryptocurrency trading licenses in a bid to revive the entire regu...



Financial regulators in the Baltic state of Estonia want to revoke all cryptocurrency trading licenses in a bid to revive the entire regulatory regime.

Matis Mäeker, head of the Estonian Financial Intelligence Unit (FIU), urged the state to “reset regulations and restart licensing”, local news agency Eesti Ekspress. reported Wednesday.

Mäeker claimed the public was unaware of the risks in the cryptocurrency industry. Former head of the anti-money laundering department at the Financial Supervisory and Resolution Authority, the official highlighted a number of related concerns, including illegal crypto activities, such as money laundering and financing. terrorism, as well as the industry’s vulnerability to piracy, stating:

“These risks are very, very high. We must react cardinally and very quickly.

About 400 companies in Estonia now socket a Virtual Asset Service Provider (VASP) license, which is more than the total VASP licenses granted across the European Union, Mäeker said. According to the official, these companies only use their licenses to “hand over very large sums, while Estonia gets nothing”.

In its current state, the Estonian crypto industry does not create jobs for citizens and contributes “nothing of importance” to the country’s tax authorities, he said.

Mäeker proposed to introduce stricter capital requirements for the industry, including potentially requiring crypto companies to have at least 350,000 euros ($ 404,000) in cash or securities. The existing capital requirement for industry startups is said to be just 12,000 euros ($ 13,800).

Related: Europe Becomes Biggest Crypto Economy With Over $ 1 Million In Transactions – Chainalysis

The official also suggested requiring crypto companies to set up more secure IT systems and prohibiting them from accepting anything other than hard cash for investment instead of options such as the refinancing the property to increase investor protection.

As previously stated, the Estonian FIU has launched major crackdown campaign on crypto companies in June 2020, after revoking the licenses approximately 70% of all VASPs in the country in December of last year. According to Estonian Public Broadcasting, the regulator revoked a total of 1,808 VASP licenses in 2020.