Estonia Tweaking Its Regulatory Attitude towards CryptocurrencyDecember 3, 2018
Estonia used to be a crypto-friendly nation, and they continue to be crypto-friendly; however, they are geared towards tweaking their regulatory attitude towards this digital currency to prevent money laundering and terrorism funding.
The Financial Supervision Authority (FSA) of Estonia is set to focus on companies who are offering crypto-based services. If there will be a regulatory overhaul, the cryptocurrency exchanges are likely to be vulnerable. This is because the regulatory norms are requiring trading platforms to work in compliance with anti-money laundering laws (AML). They are also to perform KYC (Know Your Customer) diligence checks. Thus, no markets are going to remain unaffected.
Just like several other regulators, the Financial Supervision Authority is mostly concerned with the point of sale where the fiat is being exchanged for the cryptocurrency. This is for the first time that any regulator has begun to target the primary point of exchange between fiat and cryptocurrency.
Estonia is already a well-established market where token sales and ICOs happen actively. The main reason for this being that the registration process for the cryptocurrency business is easy in Estonia. Therefore, this place is the home to several cryptocurrency startups. During the peak years of cryptocurrency expansion, Estonia was ranked among the top 15 countries concerning fundraising through ICO.
With the crowd sales process, Estonia did not provide a free for all the countries offer. The regulatory authority stated that they will scrutinize token sales of every kind and that they will monitor the records on a case-by-case basis. Despite the usage of technology, some of the digital assets can be classified as securities. And all of these assets fall under the regional security regulations.
Apart from this, it is seen that Estonia has given up on the idea of Estcoin, the national currency. This is in freeze making it only a theoretical possibility. Being a part of the Eurozone, Estonia cannot be creating another national digital currency.
Of note, at present, there are nine Bitcoin nodes in Estonia. This is comparatively low when considering that Estonia is a European country. This is indicative of how strict and regulated the local crypto community is functioning.
Over the past months, the ecosystem for crypto projects is not any better. The local regulators have examined several problems that have come up due to a few of the crypto transaction. The regulator, therefore, is with an aim to prevent unsupervised cryptocurrency trading. Theoretically, cryptocurrencies can be used to hide assets and as well move them. However, due to the current price volatility and the other limitations applicable to the trading process, it is not easy in real time practice. Regulators continue to establish an upper hand.