Estonia Tightens Checks on Crypto Firms, Cancels 500 Licenses!

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Quote from: Lucius on June 22, 2020, 08:19:40 AM

For years, Estonia has been known as one of the European countries where it was very easy to get a license for crypto business. Out of a total of 1400 such licenses, 500 have been revoked so far, and the main reason given is the prevention of money laundering. It is known that one of the largest known cases of money laundering took place in Estonia through a branch of Denmark Bank ($230 billion), and last year investors have filed a lawsuit worth $475 million.

In addition to revoking licenses, the rules for obtaining them are changing - instead of 30 days, the process is extended to 90 days, and the license fee is increased from 345 EUR to 3300 EUR. It will also be mandatory that "Crypto entities registered in Estonia will also need to incorporate in the country or open an Estonian branch of a foreign company."

I personally welcome such initiatives, because if we want a greater adaptation, we must move crypto as far away as possible from being a desirable tool for all criminal activities.

https://www.financemagnates.com/cryptocurrency/regulation/estonia-tightens-checks-on-crypto-firms-cancels-500-licenses/

Its definitely a good thing. Though a good initiative i would say the fee hike is way too high for any startup company.

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Quote from: Suptiele on June 24, 2020, 03:32:10 PM

3300 euros is not enough, that obtaining a license and building in Estonia to start work is not expensive, I do not think that a company that wants to start seriously in the activity of encryption does not contain more than 1 bitcoin as founding liquidity.
Are there any legal documents, more restrictions, or just an increase in taxes?

This is a good thing in my opinion, because this will be a good measure to prevent illicit activities, the bureaucracy does have its benefit sometimes. I do not know much about documents though but if I were to deduce there will be more documentations as expected of prolonged registration, I am pretty sure that it will come with more follow-ups.

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Quote from: Suptiele on June 24, 2020, 03:32:10 PM

3300 euros is not enough, that obtaining a license and building in Estonia to start work is not expensive, I do not think that a company that wants to start seriously in the activity of encryption does not contain more than 1 bitcoin as founding liquidity.
Are there any legal documents, more restrictions, or just an increase in taxes?

The liquidity has nothing to do with the license's price. The license allows you to run your business and the liquidity indicates its capacity to pay its debts in the short term to pay suppliers, taxes, etc (it's also different from the solvability in accounting).

You can very well have less than 1 BTC (as your example)... if your company doesn't need much (companies don't have accountancy in BTC by the way)

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3300 euros is not enough, that obtaining a license and building in Estonia to start work is not expensive, I do not think that a company that wants to start seriously in the activity of encryption does not contain more than 1 bitcoin as founding liquidity.
Are there any legal documents, more restrictions, or just an increase in taxes?

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I understand the initiative to combat money laundering, and compared to other European countries, Estonia's process and rules on obtaining licenses is still pretty lax and a lot more cheaper and easier. With the surge of crypto firms trying to get registered and obtain that 'legal' status on most books, it's just right that some countries step up their game to avoid having tons of scammers pooled in their area. If we want the scene to improve and to be embraced by a lot of people aside from us, we have to be open on these strict changes for the betterment of the service that really wants to do its bit for the crypto world.

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Quote from: jseverson on June 23, 2020, 12:27:34 AM

Man it's ridiculous how low Estonia's still is in comparison. It's also pretty funny seeing Malta's that high, considering its marketing image of Blockchain Island. Either way, this might be the reason why they increased their fees:

If I were a jurisdiction gunning to be a 'crypto haven' I would be demanding of the people who want my endorsement but I'd try to keep the fees as low as possible. We all know it's an early phase with a lot to play for still.

That means you're going to get some absolute scum who you want to deter at all costs, and future titans who you want to retain at all cost. It's quite possible the scum will have more money to throw at you.

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Quote from: Mbitr on June 22, 2020, 02:45:17 PM

Gibraltar - up to £30,000
Malta - up to £24,000
These fees have historically put fly by night companies off, perhaps places with stricter controls will help in the long term . I hope so

Man it's ridiculous how low Estonia's still is in comparison. It's also pretty funny seeing Malta's that high, considering its marketing image of Blockchain Island. Either way, this might be the reason why they increased their fees:

Quote from: https://www.financemagnates.com/cryptocurrency/regulation/estonia-tightens-checks-on-crypto-firms-cancels-500-licenses/

So far, the FIU dropped the hammer largely on crypto firms that failed to start operations in Estonia within six months of getting a permit, Bloomberg reported, quoting Madis Reimand, who heads the Baltic country’s intelligence unit.

Some firms could be getting permits and using those to add some legitimacy in their operations, even without directly being based in Estonia.

It's also worth noting that the banking scandal OP mentioned triggered this change, not any of the crypto companies registered. Bankers and ruining crypto often seems to go hand in hand lol.

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Estonia was definitely the place crypto companies flocked to , in part due to fairly lax regulation, very low licensing fees and mainly due to not needing a physical entity in the country. Places like Malta and Gibraltar are desperate to become crypto islands , with stricter regulations in Gibraltar and Malta , Estonia took advantage but it looks to have backfired.
Malta and Gibraltar , for example (just picked these) require a physical presence in their jurisdictions and the fees are a lot higher -
Gibraltar - up to £30,000
Malta - up to £24,000
These fees have historically put fly by night companies off, perhaps places with stricter controls will help in the long term . I hope so

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The cost increase from €345 to €3300 sounds very high though for a startup to pay although is probably in line with other licenses (or still a lot cheaper)...

And yeah trying to take out money laundering is good for them to do unless those people are just going to move elsewhere but just shutting those firms down could send a positive message to other (1) crypto isn't just used for money laundering (2) it's being more actively regulated than it has in the past...

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For years, Estonia has been known as one of the European countries where it was very easy to get a license for crypto business. Out of a total of 1400 such licenses, 500 have been revoked so far, and the main reason given is the prevention of money laundering. It is known that one of the largest known cases of money laundering took place in Estonia through a branch of Denmark Bank ($230 billion), and last year investors have filed a lawsuit worth $475 million.

In addition to revoking licenses, the rules for obtaining them are changing - instead of 30 days, the process is extended to 90 days, and the license fee is increased from 345 EUR to 3300 EUR. It will also be mandatory that "Crypto entities registered in Estonia will also need to incorporate in the country or open an Estonian branch of a foreign company."

I personally welcome such initiatives, because if we want a greater adaptation, we must move crypto as far away as possible from being a desirable tool for all criminal activities.

https://www.financemagnates.com/cryptocurrency/regulation/estonia-tightens-checks-on-crypto-firms-cancels-500-licenses/

Topic: Estonia Tightens Checks on Crypto Firms, Cancels 500 Licenses! (Read 183 times)