During the last weeks of 2021, the Estonian government passed a draft of a new amendment to the National Money Laundering and Terrorist Financing Prevention Act. The amendment particularly addresses the Virtual Asset Service Providers.
The news quickly alarmed the crypto industry. There have been concerns that the Ministry of Finance intends to entirely outlaw crypto.
However, the Ministry said that there is no reason for such concerns. As stated, the new regulation refers only to businesses and providers of crypto services. Individual owners of crypto assets won’t be subjects to the new bill. Owning crypto will remain legal in Estonia.
At the moment, the draft is submitted to Parliament, waiting to go through a regular procedure before coming to force.
In legal terms, the purpose of the new amendment is to align national laws with international financial legislation. The government is trying to implement the instructions suggested by the Financial Action Task Force.
The most significant changes introduced by the new bill are about the anonymity of crypto accounts opened in Estonia. According to the new law, Estonian VASPs will have to acquire personal data for all accounts and wallet holders.
Moreover, the law prescribes new rules for granting the licenses.
First of all, only VASPs that provide services in the country or are in some way related to Estonia will be eligible for a license.
Furthermore, the minimum requirements for official authorization are changed. In order to become a licensed wallet service, exchange, and similar, a VASP needs to have a minimum of €125,000 capital stock.
This minimum is significantly higher for VASPs that intend to provide transfer services. Their share capital is now set to a minimum of €350,000. In the past, the amount was only €12,000.
Also, the forthcoming legislation increases the license fees. The amount VASPs need to pay in order to apply for a license will change from €3000 to €10,000.
Finally, the crypto businesses will have to pay a new supervision fee. The fee will take 0.035% of the total transactions amount and 1% of capital stock.
Even after the Ministry’s reassuring, the opinions within the industry remain divided. On the one hand, there are voices claiming that the new legislation is only an introduction to a complete crypto ban in the future.
Others disagree, seeing the new law as a step closer to a properly regulated market. According to them, it can only lead to safer trading and clear KYC standards.