Cryptocurrency license in Estonia: new rules

Estonia is one of the most popular countries for cryptocurrency companies. Among the reasons are transparent and clear laws that regulate the crypto business, as well as the possibility to get a cryptocurrency license in Estonia, which indicates the reliability of the company, a solid financial position.

Cryptocurrency license: changes until 2020

Cryptocurrency exchanges in Estonia operate legally, which became possible in 2017 after amendments to AML/CFT laws (anti-money laundering and anti-terrorist financing). The new rules required strict reporting and compliance with KYC and AML rules for companies.

The country began issuing 2 licenses:

• for cryptocurrency exchange;
• for the services of providing virtual wallets for storing digital assets.

The rules for obtaining were quite liberal, so they attracted the attention of fraudsters. There were several high-profile scandals, and the government had to revoke about a thousand cryptolicenses and change the rules for obtaining them.

Cryptolicense: 2020 changes

The last major changes in cryptolicense regulations in Estonia that stirred up the cryptocurrency world were adopted in 2020. Some of the innovations were so serious that they partially halted the flow of startups into the country.

Among the pluses, the new rules merged two licenses into one. Thus, they freed from the need to duplicate documents to companies that were engaged in both the exchange of digital assets and their storage. The role of the regulator was taken over by the Financial Supervision Authority.

Other innovations include:

• The amount of authorized capital for a cryptocurrency company was raised to €12000. The money must be in an account by the time the license is granted;
• Corporate account can be opened in any bank or EU payment system;
• The main office must be in Estonia;
• There must be an employee on the staff, who will monitor compliance with AML/CFT rules;
• All responsible employees must have a crystal clear reputation, higher education, effective experience in the cryptocurrency industry;
• The cost of the license has increased several times over;
• The director of a cryptocurrency company must be a local resident;
• All companies that received a cryptolicense before 1.07.2020 must take measures to meet all the conditions, otherwise they can be closed.

Thus, it became more difficult to get a cryptocurrency license in Estonia, but its presence indicates the seriousness and reliability of the company.

What's next

The new rules gave rise to unfounded rumors, which put the brakes on getting a license. For example, there was talk that the new rules would ban bitcoin trading or shut down cryptocurrency wallets.

The Ministry of Finance has said that Estonia has no plans to outlaw cryptocurrency ownership, as some rumors in social networks claim. Thus, there is a high probability that additional rules will appear soon, which will greatly interest investors.

How to get a cryptolicense in Estonia

If you want to run a crypto business in Estonia, contact IT-OFFSHORE experts and we will help you.