The financial regulators in the Baltic state of Estonia want to revoke all licenses for crypto exchange and start the whole regulatory regime from the beginning.
High risks and license revocation
Matis Mäeker, head of the Estonian Financial Intelligence Unit (FIU), called on the state to “start issuing licenses completely again,” the local state news agency Eesti Ekspress said on Wednesday.
Mäeker stated that the public is not aware of the risks of the cryptocurrency industry. A former former head of the anti-money laundering unit at the Office of Financial Supervision and Crisis Management has highlighted a number of related concerns, including illegal activities in cryptocurrencies such as money laundering and terrorist financing, as well as the vulnerability of the industry to hackers. , and stated:
“These risks are very, very high. We must respond cardinally and very quickly. “
In Estonia, approximately 400 companies now have a Virtual Asset Service Provider (VASP) license, more than the total number of VASP licenses granted across the European Union, Mäeker said. According to the official, these companies only use their licenses to “turnover very high amounts, while Estonia has none of it”.
In its current state, the Estonian crypto industry does not create jobs for citizens or contribute to “any significant” tax authorities in the country, he said.
Mäeker proposed introducing stricter capital requirements for the industry, including the potential obligation for crypto companies to have at least € 350,000 ($ 404,000) in either cash or securities. The current equity requirement for start-ups in the sector is said to be only € 12,000 ($ 13,800).
The official also suggested that crypto companies be required to set up more secure IT systems and be prohibited from accepting anything other than hard cash for investment instead of options such as real estate refinancing, in order to increase investor protection.
As previously reported, the Estonian FIU launched a large-scale crackdown on crypto companies in June 2020, with approximately 70% of all VASPs in the country having been licensed by December last year. According to Estonian public radio, in 2020 the regulator withdrew a total of 1,808 VASP licenses.
One can probably understand the effort to protect investors more. But is it really just this effort, or do you see something more behind it?