The government of Estonia has proposed a legislation draft to the parliament to tighten the current regulation regarding virtual currency licences. In the 11th of December 2019 President of Estonia signed this proposal and it will take effect 20 march of 2020.
The government proposal intends to amend the current Money Laundering and Terrorist Financing Prevention Act in a way that providers of a service of exchanging a virtual currency against a fiat currency and providers of a virtual currency wallet service would have to follow the same requirements that are set for financial institutions.
From 20th march of 2020 the management board or actual beneficiaries would be required to have the necessary knowledge, skills, experience, education, professional aptitude and impeccable reputation to acquire for cryptocurrency license in Estonia.
Entities with cryptocurrency licences in Estonia would have to establish in written form a ‘Risk appetite’ which means the total of the exposure level and types of the obliged entity and determine whether business relationships will be established with persons outside the EEA or e/residents.
It would also have necessary to appoint a person who acts as a contact person of the Financial Intelligence Unit. The compliance officer is in charge of implementation of Money Laundering and Terrorist Financing Prevention Act and legislation and guidelines adopted on the basis thereof. The compliance officer can be asked to visit the department of police and border guard for identifying a person's suitability to act as a compliance officer or for cooperation.
Entities with cryptocurrency licences in Estonia would be forbidden to establish or continue correspondent relationships with shell banks and such credit institutions or financial institutions that knowingly allow shell banks use their accounts.
Read our previous article about cryptocurrency by clicking here.
If you are interested to learn more about cryptocurrency and require license in Estonia, please refer to our Baltic lawyers at info@gencs.eu