Number of registered crypto companies in Estonia falls by 80%

In Estonia, the number of registered cryptocurrency companies has fallen by almost 80%. That information was reported by the Money Laundering Data Bureau (RAB).

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Since the tightened requirements of the Money Laundering and Terrorist Financing Prevention Act came into force, around 200 companies relinquished their business licenses. Approximately the same number were revoked by the RAB for non-compliance with the requirements. In total, licenses were revoked from 389 firms.

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According to the agency’s head, Matis Mäe, when renewing permits the Bureau repeatedly encountered ‘suspicious circumstances’ that could potentially indicate ties to illicit activity.

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In several cases, the RAB identified individuals appointed as board members or contact persons who themselves did not know about it, did not have proper business credentials and whose resumes had been falsified. Business plans submitted by several companies contained financial forecasts, typographical errors, and were devoid of any logic.

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Documents were often submitted in incorrect Estonian — in some cases, machine translations used were inadequate. Applications from many companies were submitted through the same providers of legal services.

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According to the current law, cryptocurrency companies operating in Estonia must hold a minimum level of capital and have in their staff experts in compliance with AML requirements.

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As of 1 May 2023, Estonia had 100 business licenses to provide crypto-related services.

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Earlier, in 2020, Estonian authorities revoked licenses of more than 1,000 firms operating in the digital-asset space.

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In January 2021, the Ministry of Finance presented a draft law tightening requirements for crypto companies.

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In October, Matis Mäe proposed to revoke all previously issued licenses. Later, the agency explained that this would not lead to automatic cancellation of the documentation.