Estonia has always been famous for its attractiveness for crypto traders. It attracted foreign entrepreneurs of crypto activities with its simplicity and transparency, with its low and the most profitable requirements for obtaining licenses for crypto companies, with the absence of income tax and a relatively low tax rate in Europe. As for the end of 2019, there were about 1800 operating companies in Estonia with licenses for exchange and/or store virtual currency.

However, since March 10, the government proceeded with a global restructuring of the entire crypto market. The Anti Money Laundering Bureau has reviewed the Act of “Money Laundering and Terrorist Financing Prevention” and made its own adjustments. All operating companies with crypto licenses, in less than 4 months, were required to comply with a number of requirements of the new law, and by July 1, submit all documents confirming the fulfillment of the requirements.

The amendments to the law were primarily aimed at preventing situations associated with money laundering scandals, at clearing the sector of doubtful schemes, dishonest entrepreneurs and at clearing the reputation of the “license”.
The goal of government policy is also to attract foreign entrepreneurs to recruit local specialists.

This means that for a licensed business, as in most European countries, it is impossible to operate without a real presence. Since July, each owner of a virtual currency license must have a physical office with real employees where all company documentation is also stored and have a current account in a bank or payment institution within the European Economic Area.

As statistics show, few companies have coped with the task. More than 1400 licenses were revoked in 2020. Was is because of the unexpectedly hitting crisis and the wave of the COVID-19 pandemic around the world, or did the new requirements turn out to be an unbearable burden for entrepreneurs? It is only known that as of July 15, 55 applications for the continuation of crypto activities were approved, and 280 are currently under consideration. Nobody knows how the further situation will develop since the entire system is in the test mode. The Anti Money Laundering Bureau immediately warns that the checks cannot be avoided. Be prepared for sudden visits and conversations.

Although the numbers are shocking and the lack of information is depressing, obtaining virtual currency licenses in Estonia is still one of the most affordable and fastest ways to launch crypto projects. We only advise you to think over the entire plan and stages of development of commerce in advance.

If you would like to receive additional information or if you need help in obtaining a license in accordance with the new requirements, please contact our specialists.