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The Estonian government has passed a bill that would see crypto service providers subject to new requirements. Under the proposed legislation, crypto firms would be supervised by Estonia’s Financial Supervision Authority (FSA).
The law is a shift from the previous requirements that the providers be registered by the Financial Intelligence Unit (FIU) and fulfill the anti-money laundering (AML) rules. Mart Võrklaev, the Estonian Finance Minister, was quoted by local sources saying:
If these firms wish to continue to operate, they will comply with the necessary requirements and I believe that anyone who takes this seriously and wishes to provide a service will also be able to obtain a new license from the Financial Supervisory Authority.
The FSA mandate of issuing licenses to crypto firms is expected to start in 2025. Providers with FIU licenses will need to reapply for FSA licensing per the new requirements in the same year.
The proposed law, which now awaits the Estonian parliament’s approval, will bring the country into conformity with the EU’s landmark MiCA regulations.
The law also amends the securities prospectus requirements. Previously, firms were required to draft detailed prospectuses if they were seeking to raise capital of more than 5 million euros through sales or bonds. The draft law has raised the amount to 8 million euros or $8.64 million.
Fines of up to 5 million euros ($5.2M)
The law tightens up reporting and operational requirements for Estonian crypto service providers. The new bill comes amid the need to increase reliability in the Estonian crypto market. Despite positioning itself as a crypto-friendly jurisdiction in 2017, Estonians have suffered frequent crypto business collapses and cyber thefts.
Under the new law, providers will be charged up to 5 million euros or $5.2 million for anti-money laundering violations. The amounts are a significant increase from the previous 40,000 euros or $43,450.
FIU chief Matis Mäeker believes bringing the crypto companies under the FSA supervision will bring crypto crimes under control. Redgate Wealth’s chief investment officer, Peeter Koppel, expects the move to increase the credibility of the crypto sector, with speculators as its main beneficiaries.
The post Estonia's crypto service providers face new regulations as government approves bill appeared first on Invezz
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