According to a press release issued by the Estonian Ministry of Finance, there will be no crackdown on cryptocurrencies in the country.
The remark comes in reaction to the Estonian government’s December 23 submission of a draft law aimed at “more effectively regulating virtual asset service providers (VASPs) to decrease the danger of financial crime.”
It adds that the restriction only applies to VASPs and that individuals can still own and sell virtual assets through their wallets.
“Accounts opened with Estonian VASPs cannot be anonymous, and Estonian VASPs cannot offer anonymous accounts or wallets,” says the statement.
As a result, VASPs must identify users for whom transactions “similar to bank transfers” are permitted, and risk analysis must be done if such information is not provided. The country’s Parliament is now considering the law.
Estonia saw a surge in crypto-related enterprises after becoming one of the first countries to provide cryptocurrency licenses in 2017.
In 2019, nearly 2,000 licenses were terminated following increasing regulatory scrutiny in the sector, leaving only about 400 firms with them.
This was prompted by claims that the local arm of Denmark’s largest bank processed billions of euros in illegal funds in 2018.
The new laws come ahead of a review of the country’s anti-money laundering procedures, which is set to take place this quarter in accordance with similar moves done by the Council of Europe.
Matis Maeker, the director of Estonia’s Financial Intelligence Unit (FIU), which has the jurisdiction to grant and revoke crypto licenses, previously stated that all licenses would be canceled, prompting companies to reapply in light of the scheduled assessment.
His spokesman then clarified that this was not the official view of the EU and that the Estonian government would not pursue this course of action.
