The Estonian government has approved a bill regulating cryptocurrency service providers, according to state media reports. It still has to pass a vote in parliament.
Under the legislation, providers would be subject to supervision by the Financial Supervisory Commission (FSC). Currently, cryptocurrency service providers are registered with the Financial Intelligence Unit (FIU) and are required to comply with anti-money laundering (AML) regulations. The FSA would start issuing licenses in 2025, and FIU license holders would have to apply for an FSA license before the end of that year. Estonian Finance Minister Mart Võrklaev said.
"I believe that anyone who takes this seriously and wants to provide the service will also be able to obtain a new license from the Financial Supervisory Commission."
Under domestic law, fines for AML violations are a maximum of 40,000 euros ($43,450). Under the new law, fines of up to 5 million euros ($5.2 million) will be possible.
Võrklaev said that last week he sent the government a draft law, which has not been translated into English. The bill must be approved by the government before it goes to a vote in the Riigikogu, Estonia's unicameral parliament.
The bill would bring Estonia into line with European Union regulations on cryptocurrency markets (MiCA). It would also change prospectus requirements for securities. While previously companies wishing to raise capital in the form of shares or bonds worth more than €5 million had to prepare a detailed prospectus - a slow and expensive undertaking - the threshold would now be raised to €8 million ($86.9 million).
Estonia positioned itself as cryptocurrency-friendly in 2017, when it passed legislation with favorable regulations for crypto companies and easy registration, including e-residency. It cracked down on cryptocurrency companies in 2020 after a large-scale corruption scandal unrelated to cryptocurrencies erupted in the country.
