Estonia squeezes out 400 crypto firms after new laws
Almost 400 Virtual Asset Service Providers (VASPS) have voluntarily shut down or had their authorizations revoked in Estonia following the government’s recently enhanced Terrorist Financing Prevention and anti-money laundering laws (AML) that came into effect in March.
The amended laws expanded the defined scope of VASPs, required firms to have legitimate links to Estonia, increased licensing fees, and capital and information reporting requirements, along with introducing the Financial Action Task Force Travel Rule.
According to a May 8 statement from the Estonian Financial Intelligence Unit (FIU), the amendment to the AML laws on March 15 has since seen almost 200 domestic crypto service providers voluntarily shut down.
While around 189 also had their authorizations revoked due to “non-compliance with the requirements.”
“Given the documents submitted by the service providers that have lost their authorisations, and their methods of operation and the risks involved, it can be argued that the legislator’s response with regard to the amendments to the Act, and the supervision activities both before and after the amendments, have been relevant,” noted Matis Mäeker, the Director of the Financial Intelligence Unit, adding:
Following the hefty clear-out, there were 100 active crypto firms registered in Estonia as of May 1, according to the FIU.
The FIU highlighted a number of general issues it found within the companies it forcibly shut down, particularly relating to misleading company information.
To name a few examples, some companies had registered board members and company contacts unbeknownst to the actual individuals themselves, while others companies had a number of people on the books that had falsified professional
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