Estonia revoked 500 licenses from crypto companies amid scandals in the banking industry
Estonian regulator revoked 500 licenses or 30% of the total from registered cryptocurrency companies, Bloomberg reports.
The tightening of requirements for participants in the financial space is taking place against the backdrop of several major scandals in the banking industry. The largest Danish bank Danske Bank in early 2019 was accused of laundering $ 220 billion through a small division in Estonia.
Estonia became one of the first countries in Europe to legalize cryptocurrency companies. This happened back in 2017. In less than 3 years, over 1,400 industry representatives have acquired legal status.
The Estonian Financial Supervision Authority (FIU) says that the latest measures are not aimed at curbing the development of the cryptocurrency industry, but their real purpose is to reduce the risks of money laundering. First of all, the attention of the regulator was attracted by those companies that did not start operating activities within 6 months from the date of obtaining the appropriate permission. Such companies, according to the regulator, can use the Estonian license to conduct fraudulent activities abroad..
“This is the first step towards clearing the market. It will allow us to solve the most pressing issues and only allow those companies to work that can be subject to supervision in Estonia and in respect of which enforcement measures can be taken, ”said the head of the FIU Madis Reimand.
According to him, the regulator has learned the lesson of the banking industry and realized new international risks that often manifest themselves precisely when working with cryptocurrencies. For this purpose, amendments to the legislation were also adopted, which tighten the requirements for licensing of crypto companies. Among other things, applications will now be considered 90 days, and not 30, as it was before. The license fee was increased from € 345 to € 3,300. Official crypto companies must be based in Estonia or have a separate division if they are managed by a foreign entity.
More than half of the remaining 900 crypto companies in Estonia may lose their licenses if violations are not addressed soon, Reimand added..
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