May 09, 2023 12:25
Enforcement of last year’s amendment
to Estonia’s anti-money laundering (AML) and countering the financial of
terrorism (CFT) regulation has
resulted in a dramatic drop in the number of licensed cryptocurrency service
providers. As of May 1, 2023, there were only 100 crypto firms with operating
licenses, which
is an 80% drop from 489 as of March 15, 2022, when the amended Money
Laundering and Terrorist Financing Prevention Act came into force.
According to the Estonia
Financial Intelligence Unit (FIU), a total of 389 operating licenses have been withdrawn
either voluntarily or based on its action. Of this number, nearly 200 were
withdrawn by the companies while about the same number were revoked by the
financial transactions watchdog.
Watchdog Finds 'Lot of Suspicious
Circumstances'
FIU explained that it found 'a lot of suspicious
circumstances' in crypto firm’s license applications following tougher checks in line with the amended regulation.
“This calls into question the
credibility of the businesses that wanted to come here and their actual desire
to provide services in Estonia,” said Mäeker in a statement. “It also shows the desire of some
individuals to use the Estonian economic system and financial system for
illegal activities.”
Providing more details on its
findings, FIU noted that in a number of cases it identified individuals
appointed as Board Members or contact persons without their knowledge. Some of
these persons had their CV forged while others lacked proper business reputation.
Furthermore, the independent
agency, noted that
business plans submitted by a number of companies overlapped in areas such as
financial forecast. They also contained typos and lacked any logic. In fact, many of the firms patronized the same legal or corporate service
providers, the regulator said.
“When renewing operating
licences, we saw situations that would raise an eyebrow at every
supervisor," noted Mäeker.
On top of this, FIU noted that
it will continue reviewing the operational licenses of crypto firms. It also
hopes it will “be able to return to normality in terms of supervision, where we
will move from a largely paper-based assessment to daily on-site supervision.
Estonia: Top Crypto Destination
Estonia, a country in Northern Europe, is
considered one of the most crypto-friendly countries in the
continent alongside Switzerland, Denmark, Germany and Slovenia. As of summer of
2021, when Matis Mäeker, FIU’s new head, came into office, about 650 crypto
services licenses were valid in the Baltic nation, the regulator said.
However,
in recent years, the country's regulators have been cracking down on crypto
firms. In 2020, regulators revoked licenses of 500 cryptocurrency
firms, translating to roughly 30% of total approved providers at the
time. The move came as a series of scandals in Europe undermined trust in authorities’ ability to
tackle money laundering.
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This article was written by Solomon Oladipupo at www.financemagnates.com.
World Crypto Global
