Around 400 crypto-related businesses operating in Estonia have licenses despite the fact that the Estonian government cancelled nearly 22,000 licenses in the past year.
Financial regulatory authorities in Estonia’s Baltic nation of Estonia are seeking to cancel the licenses of crypto exchanges to begin the entire regulatory system from scratch.
Matis Maeker, head of the Estonian Financial Intelligence Unit (FIU), has urged the government to begin granting licenses from the start once more.
Maker stated that the public isn’t aware of the risks associated with the cryptocurrency market. As the former director of the Anti-Money Laundering department at the Financial Supervision and Resolution Authority, The official highlighted several issues related to the industry that include illegal cryptocurrency activities that include the financing of terrorism and money laundering and the vulnerability of the industry to hackers.
Around 400 businesses located in Estonia currently have the virtual asset supplier (VASP) license that is greater than the total licenses issued across the European Union, Maeker claimed. According to Maeker, these companies are only permitted order to “turn over very large sums, while Estonia gets nothing out of it.”
At present, it is clear that the Estonian crypto industry doesn’t create jobs for its citizens, nor does it contribute “anything significant” to the Estonian tax authorities He said.
Maker proposed to establish more strict capital requirements for the sector and could even require crypto companies to hold a minimum $350,000 ($404,000) in the form of securities or cash. The equity requirement currently for startup companies in the industry currently stands at 12000 euros ($13,800).
A senior official suggested that crypto firms put in place security-conscious IT infrastructures, as well as restricting them from accepting anything other than hard cash as an investment, instead of alternatives like refinancing properties in order to protect investors.
As we previously mentioned in the past, The Estonian FIU began major crackdowns on crypto-related companies in June of 2020. In December of the previous year, they had removed all licenses of about 70% of VASPs. Based on Estonian Public Broadcasting, the regulator has revoked 1,808 licenses for VASP in 2020.
Gargi Sinha is working as Senior Journalist at Confea. She has completed her Masters in Journalism from Delhi University. She has interest in crypto and blockchain technology.