Under the proposed legislation, cryptocurrency service providers would fall under the purview of the Financial Supervision Authority (FSA), marking a shift from the current oversight by the Financial Intelligence Unit (FIU). While the FIU mandates adherence to Anti-Money Laundering (AML) rules, the FSA’s involvement would signify a more comprehensive regulatory framework, ensuring stricter compliance measures.
Estonia’s Finance Minister, Mart Võrklaev, emphasized the importance of this regulatory overhaul, stating that obtaining a license from the FSA would be essential for serious players in the crypto space. This move reflects Estonia’s commitment to fostering a secure and transparent crypto ecosystem while mitigating the risks associated with financial crimes.
One of the notable changes introduced by the bill is the significant increase in potential fines for AML violations. While previously capped at 40,000 euros ($43,450), fines could now reach up to 5 million euros ($5.2 million), underscoring the government’s resolve to combat illicit financial activities effectively.
Moreover, the proposed legislation aims to streamline the process for companies seeking to raise capital through shares or bonds. By raising the threshold for securities prospectus requirements from 5 million euros to 8 million euros ($86.9 million), Estonia aims to facilitate smoother access to capital markets for businesses, fostering innovation and economic growth.
Estonia’s proactive stance on crypto regulation dates back to 2017 when it introduced favorable legislation for crypto firms, positioning itself as a crypto-friendly jurisdiction. However, recent developments, including a corruption scandal unrelated to crypto, prompted the government to reevaluate its regulatory approach, leading to a more stringent regulatory framework.
As Estonia moves towards aligning its crypto regulations with EU standards, the proposed bill signifies a crucial step in ensuring the integrity and stability of its financial system. By subjecting cryptocurrency service providers to enhanced supervision and compliance measures, Estonia aims to bolster investor confidence and attract responsible actors to its burgeoning crypto
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