New law pushes around 400 crypto firms out of Estonia

The number of registered crypto firms in Estonia has dropped by 80% after it enacted a new law to prevent money laundering.

The money laundering regulator in the country, Financial Intelligence Unit, published a report stating that the validity of 389 authorizations has expired, and there are only 100 active authorizations for virtual assets service providers.

The controversial law is the Money Laundering and Terrorist Financing Prevention Act. Amendments to the law took effect on March 15, 2022.

Crypto exodus

Since then, 200 crypto firms in the country have voluntarily abandoned their authorizations. The FIU also revoked 189 due to non-compliance with the requirements of the amended Act.

The Director of the Financial Intelligence Unit, Matis Mäeker, said the documents submitted by firms that lost their authorization show “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.”

Estonia is one of the most friendly countries for tech startups, including crypto firms. But it also faces a reputational risk due to money laundering scandals and crypto scams.

In its efforts to repair its reputation, it has tightened its money laundering laws and made it compulsory for crypto firms to re-apply for licenses. The regulator claimed it “saw situations that would surprise every supervisor” when renewing authorizations.

These include identical business plans by applicants, management board members who were unaware of their appointments, falsified CVs, and other issues. Besides that, many of the firms submitted their applications using the same legal or company services providers.

The regulator plans to continue reviewing authorizations but expects it to return to “normality in terms of supervision.”

The post New law pushes around 400 crypto firms out of Estonia appeared first on CryptoSlate.

Source: https://cryptoslate.com/new-law-pushes-around-400-crypto-firms-out-of-estonia/