138 Interactions, 2 Today
After the state revoked nearly 2,000 licences last year, approximately 400 crypto businesses in Estonia still have licences.
Estonian financial regulators want to revoke all cryptocurrency exchange licences in an effort to restart the entire regulatory regime from scratch.
Matis Mäeker, head of the Estonian Financial Intelligence Unit (FIU), has urged the state to “turn the regulation to zero and start licensing all over again,” local state-run news agency Eesti Ekspress reported on Wednesday.
Mäeker claimed that the public is unaware of the risks of the cryptocurrency industry. Formerly the head of the Anti-Money Laundering department at the Financial Supervision and Resolution Authority, the official pointed out a number of related concerns, including illegal crypto activity, such as money laundering and terrorism financing, as well as the industry’s vulnerability to hacks, stating:
“These risks are very, very high. We need to react cardinally and very quickly.”
About 400 companies in Estonia now hold a virtual asset service provider (VASP) license, which is more than the total VASP licenses granted in the entire European Union, Mäeker claimed. According to the official, such companies only use their licences to “turn over very large sums, while Estonia receives nothing.”
According to him, the Estonian crypto industry currently neither creates jobs nor contributes “anything significant” to the country’s tax authorities.
Mäeker proposed stricter capital requirements for the industry, such as requiring crypto companies to have at least 350,000 euros ($404,000) in cash or securities. According to reports, the current equity requirement for industry startups is only 12,000 euros ($13,800).
In order to increase investor protection, 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 rather than options such as refinancing property.
As previously reported, the Estonian FIU began a major crackdown on crypto companies in June 2020, revoked licences for roughly 70% of all VASPs in the country by December of last year. According to Estonian Public Broadcasting, in 2020, the regulator revoked 1,808 VASP licences.