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Why is Estonia Revoking Cryptocurrency Licenses?

Estonia’s regulator has been revoking cryptocurrency companies’ licenses for several months now. All cryptocurrency exchange owners are naturally concerned about the new developments. Many are wondering: what is the reason for this rigorous “sweeping”?

So why are crypto licenses terminated?

Initially, cryptocurrency license revocations were attributed to the EU’s new AML regulations and the recent 2019 scandal when an Estonian branch of the major Danske Bank was convicted of laundering 220 billion dollars.

Besides, quite a few experts believe that the cryptocurrency “sweeping” is due to the fact that the policies of many cryptocurrency companies do not comply with the general AML policy enforced by the EU.

The EU law amendments surely have imposed more stringent requirements on cryptocurrency companies in Estonia but they also have encouraged crypto companies to review their internal policies and rules. Unfortunately, many of them found themselves unprepared for the changes which included:

  • Increased state duty;
  • Increased authorized capital — now EUR 12000;
  • Appointment of an AML officer;
  • Physical presence in Estonia.

Another reason for license revocation is no operations by companies that were issued the crypto license. Most of them did not submit reports and ignored letters from Estonian regulators. Those companies did not follow the regulator’s recommendations, did not keep accounts, and did not maintain internal rules. This is the true reason for cryptocurrency loss.

As you see, company registration and licensing are not an assurance of successful cryptocurrency operations either in Estonia or other jurisdictions. It is best to entrust the task to professionals. SBSB lawyers have been supporting various cryptocurrency projects worldwide for 7 years now. Join our Telegram chat for a free online consultation.

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