Home News Estonian Ministry of Finance does not prohibit crypto

Estonian Ministry of Finance does not prohibit crypto

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The draft law on more effective regulation of Virtual Asset Service Providers (VASP), approved on December 23 by the Estonian Government, does not prohibit owning and trading cryptocurrencies. The website of the Estonian Ministry of Finance stated this.

According to the statement, the rules do not apply to customers, but to VASP. Thus, the bill has been submitted to Parliament, where it must pass three readings.

“The regulation does not affect individuals who own virtual currency through a private wallet not provided by a VASP. However, accounts opened with Estonian VASPs cannot be anonymous; and Estonian VASPs cannot offer anonymous accounts or wallets,” the press release says.

Tightening the requirements for providers of cryptocurrency services

The bill requires VASP to identify their customers and include Financial Action Task Force (FATF) guidelines; according to the Ministry of Finance. The authorities can refuse to give a license if the company does not conduct business in Estonia; or has no evident ties to the country, according to the amendment.

“VASPs will be required to have a minimum of €125,000 or €350,000 of share capital, depending on the type of service offered, increased from the current floor of €12,000 euros,” the Finance Ministry added.

In 2020, the Estonian authorities canceled the licenses of about 1,800 companies functioning in the digital assets sector. Following that, the Ministry of Finance recommended tightening the regulations for cryptocurrency service providers.

Growing concerns of money laundering and terrorist funding

Due to growing concerns of money laundering and terrorist funding, the Head of the Government Committee, Minister of Finance Keit Pentus-Rosimannus, confirmed previously announced plans to revise the standards for VASP in September 2021.

In addition, she wrote to the Estonian Financial Intelligence Unit with a request to temporarily suspend the issuance of new licenses until the new rule comes into force.

Recall that in October, the head of Estonia’s Financial Intelligence Unit (FIU), Matis Mäeker proposed to revoke all previously issued licenses for trading digital assets. According to him, the Estonian crypto sector does not create jobs for Estonians. And does not provide “anything meaningful” to the country’s tax authorities in its current condition.

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