Financial regulators in the Baltic state of Estonia want to revoke all cryptocurrency trading licenses in an attempt to revive the entire regulatory regime.
Matis Mäeker, head of the Estonian Financial Intelligence Unit (Fiu), urged the state to “restore regulations and restart licenses”, the local news agency Eesti Ekspress. reported Wednesday.
Mäeker said the public was unaware of the risks in the cryptocurrency industry. Former head of the Anti-Money Laundering Department at the Financial Supervisory and Resolution Authority, the official highlighted a number of related concerns, including illegal crypto activities, such as money laundering and financing. terrorism, as well as the industry’s vulnerability to piracy, stating:
“These risks are very, very high. We have to react cardinally and very quickly.
About 400 companies in Estonia now have a Virtual Asset Service Provider (VASP) license, which is more than the total of VASP licenses granted across the European Union, Mäeker said. According to the official, these companies use their licenses only to “deliver very large sums, while Estonia gets nothing”.
At present, the Estonian cryptocurrency industry does not create jobs for citizens and contributes “nothing important” to the country’s tax authorities, he said.
Mäeker has proposed to introduce stricter capital requirements for the industry, including the potential requirement for cryptocurrency companies to have at least 350,000 euros ($ 404,000) in cash or securities. The existing capital requirement for startups in the industry is said to be just 12,000 euros ($ 13,800).
Related: Europe becomes the largest crypto economy with over $ 1 million in transactions – Chainalysis
The official also suggested requiring cryptocurrency companies to set up safer IT systems and prohibit them from accepting anything other than cash for investments instead of options like property refinancing to increase investor protection.
As stated earlier, the Estonian FIU launched a major crackdown on cryptocurrency companies in June 2020, after revoking the licenses of around 70% of all VASPs in the country in December last year. According to Estonian Public Broadcasting, the regulator revoked a total of 1,808 VASP licenses in 2020.
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