Estonian Finance Ministry Rules Out Ban on Cryptocurrency Trading

A bill to regulate virtual asset service providers (VASP) more effectively, approved by the Government of Estonia on December 23, does not ban owning and trading cryptocurrencies. This is stated on the Finance Ministry’s website.

According to the statement, the rules apply not to customers but to VASP. The bill has been submitted to Parliament, where it is to undergo three readings.

“Regulation does not affect individuals who own virtual currency through a private wallet not provided by a VASP. However accounts opened by Estonian VASPs cannot be anonymous, and providers cannot offer anonymous accounts or wallets,” the press release states.

The Finance Ministry stressed that the bill obliges VASPs to identify their clients and incorporates FATF recommendations. According to the amendment, authorities may refuse to issue a license if the organization does not conduct business in Estonia or does not have an obvious connection to the country.

“VASPs will be required to have a minimum share capital of at least €125 000 or €350 000, depending on the type of services offered, increased from the current minimum level of €12,000,” the Finance Ministry added.

In 2020, the Estonian authorities revoked licenses of more than 1,000 companies engaged in the digital assets sector. After that, the Ministry of Finance proposed to tighten the requirements for cryptocurrency service providers.

In September 2021, Finance Minister Keit Pentus-Rosimannus confirmed the previously announced plans to change the VASP requirements in light of rising money-laundering and terrorism financing risks.

She also addressed the Estonian Financial Intelligence Unit with a request to consider a temporary suspension of issuing new licenses until the new regulation takes effect.

Earlier, in October, Matis Mäe, head of the Money Laundering Data Bureau (RAB), proposed to revoke all previously issued licenses for trading digital assets.

Later, RAB representatives, in a ForkLog interview, denied plans for automatic revocation of licenses held by cryptocurrency companies.

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