New Rules for Obtaining a Cryptocurrency License in Estonia in 2023

Estonia has become a welcoming and accommodating destination for virtual currency enthusiasts. With its forward-thinking regulations, the country has quickly earned a reputation as a «cryptocurrency haven» in a relatively brief timeframe. Estonia is the pioneering member of the European Union to implement comprehensive regulations for cryptocurrency companies.

Over the past half-decade, numerous entrepreneurs, exchanges, and exchangers have chosen to set up physical offices in Estonia, with over 2,000 businesses obtaining cryptocurrency licenses. In addition, the country’s progressive approach to virtual currencies has attracted a thriving community of crypto-related activities, making Estonia a hotspot for those looking to operate in the digital currency world.

Advantages of Crypto License in Estonia

• Estonia’s progressive approach legalizes cryptocurrency activities, offering businesses a secure and regulated environment.
• Cost-effective registration process compared to other popular crypto hubs like the US, Switzerland, and UK, saving businesses valuable resources.
• Attractive tax policies with favorable rates and incentives for crypto-related activities foster a calm business environment.
• Estonia’s leadership in digitalization and IT makes it a preferred destination for crypto businesses, benefiting from a tech-savvy ecosystem.
• Equal protection and regulation both for crypto businesses and traditional financial institutions.
• Due to Estonia’s reputable position in the cryptocurrency market, high customer confidence promotes trust and credibility.
• A well-developed banking system with easy access to financial services facilitates smooth operations for crypto businesses.
• Regulatory support and assistance are available to crypto businesses from Estonia’s proactive regulatory body, ensuring compliance and guidance.

New Regulations for Virtual Currency Service Providers

The recent amendments to the Money Laundering and Terrorist Financing Prevention Act, effective from 15th March 2022, have significantly changed the capital adequacy requirements for virtual currency service providers. Additionally, new obligations, such as conducting an audit of the annual report and internal audit, have been introduced, among other changes.

To comply with the new requirements, virtual currency providers with valid activity licenses had time to align their operations accordingly until 15th June 2022. This article highlights the key amendments to the crypto license requirements in Estonia.

As per the latest amendment to the Anti-Money Laundering and Counter-Terrorist Financing Act, all existing crypto businesses and those applying for a license must now provide the regulator with all the necessary documentation, including opening a physical office and appointing local management. The license for a virtual value service provider is issued by the Estonian Financial Intelligence Unit (FIU).

Company data, license numbers, and information about the designated person responsible for compliance monitoring are now publicly available in the electronic register. Once registered, a crypto company is granted the status of a Financial Institution (FI). Furthermore, with the introduction of the new legislation, multiple types of licenses have now merged into one called «Virtual Asset Service Provider».

New Regulations for Cryptocurrency Businesses in Estonia

Recent updates to cryptocurrency regulations in Estonia have brought about several changes for businesses seeking a cryptocurrency license. Some of the key amendments include:

• Extended Review Process: The review process for cryptocurrency license applications, which was previously 60 days, has now been extended to 120 days. You must submit all necessary documents for the license either to a notary’s office or through the Commercial Register website.
• Physical Office Requirement: Having a physical office is now a mandatory requirement for obtaining a cryptocurrency license. This office presence is expected to enhance the management and control of the company, as well as safeguard the assets and rights of the customers.
• Estonian Residency for General Manager: At least one general manager of the cryptocurrency company must now be a resident of Estonia, per the updated regulations.
• European Bank Account: To obtain a cryptocurrency license, the regulator now requires opening an account with a European payment system or bank. This process may require skilled legal assistance, which our company can provide. It will help you identify the best banks for your cryptocurrency business.
• Increased Share Capital: The share capital required for obtaining a cryptocurrency license has been changed to be either €100,000 or €250,000, depending on the specific license type.
• Revised State Fee: The state fee for a cryptocurrency license has been changed to €10,000, up from €3,300 before the regulatory updates in 2022.
• Clean Reputation Requirement: All members of the cryptocurrency company must have a spotless reputation without any criminal record or involvement in the fraud. Non-conviction certificates are required from all members of the company.

CLS offers a streamlined and convenient solution for obtaining a cryptocurrency wallet license in Estonia. Our team of seasoned professionals will provide comprehensive guidance throughout the application process, ensuring that your company easily meets all the updated requirements.

Contact us today for a complimentary consultation with no obligation, and you can expect a prompt response within 24 hours. Let us help you secure your cryptocurrency business in Estonia hassle-free.