May 10, 2023

Around 400 Crypto Firms Leave Estonia Following AML Amendments



About 400 virtual asset service providers (VASPs) in Estonia shut down their businesses voluntarily or by the authorities after the Terrorist Financing Prevention and Anti-Money Laundering Laws (AML) came into effect in March, Cointelegraph reported.

The Estonian newly-amended laws expanded the definition of VASPs, urged them to have legitimate links to the country, and upped licensing fees, and capital and information reporting requirements in addition to the introduction of the Financial Action Task Force Travel Rule.

Around 200 domestic crypto service providers voluntarily closed since the implementation of the amended laws on March 15, according to the Estonian Financial Intelligence Unit (FIU), besides another 189 VASPs, which were shut down by the authorities because they were not compliant with the requirements.

In this regard, Director of the Financial Intelligence Unit (FIU) in Estonia Matis Mäeker said every supervisor is surprised by the crypto firms while renewing authorizations, noting: “Given the documents submitted by the service providers that have lost their authorizations, and their methods of operation and the risks involved, it can be argued that the legislator’s response with regard to the amendments to the Act, and the supervision activities both before and after the amendments, have been relevant.”

After this big exit, there were 100 active crypto companies in the country on May 1, FIU said.

It is worth mentioning that Estonia was the first European country to provide clear regulations and guidelines for digital currencies. Digital currencies are considered as properities and their exchange is subject to a capital gains tax of 20%.

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