Estonian authorities revoked 500 licenses from registered cryptocurrency companies. This is about 30% of the total number of companies operating in the country, according to Bloomberg .
At the same time, the time for considering applications for obtaining licenses was increased from 30 to 90 days, and the amount of the license fee was increased from 345 euros to 3,300 euros. In addition, companies must be based in Estonia or have a separate unit if they are managed by a foreign entity.
Estonia was one of the first EU countries to legalize the activities of cryptocurrency companies. Since 2017, more than 1,400 industry representatives have received relevant licenses.
The tightening of requirements for participants in the financial space is taking place against the backdrop of major scandals in the banking industry. In early 2019, a leading Danish bank, Danske Bank, was charged with laundering $ 220 billion through a small branch in Estonia.
At the same time, the Estonian Financial Supervision Authority (FIU) states that the latest measures are aimed solely at reducing the risks of money laundering and are not intended to restrain the development of the cryptocurrency industry.
The attention of the regulator is primarily drawn to those companies that have not started operating activities within 6 months from the date of receipt of the license. According to FIU, they can use the license obtained in Estonia to carry out fraudulent activities abroad.
“This is the first step towards clearing the market, which will allow us to resolve urgent issues and only allow companies that may be subject to supervision in Estonia,” the publication quotes the head of FIU Madis Reimand.
He added that the regulator has learned the lesson learned by the banking industry, and now must confront international risks that may arise, including in the activities of cryptocurrency companies.
According to Reimand, more than half of the ongoing 900 cryptocurrency companies in Estonia run the risk of losing their licenses if they do not eliminate the violations in the near future.
Recall that the control of the issuance of cryptocurrency licenses by the Estonian government tightened in May 2019
Companies that have cryptographic licenses in Estonia must bring their activities and documents in line with the amendments to the Law on Combating Money Laundering and the Financing of Terrorism by July 1, 2020.
