Two thirds of Estonian crypto businesses lose their licenses

One of the countries lauded as being among the most crypto friendly in the European Union revoked the licenses of more than 1,000 crypto firms in 2020. 

According to news outlet Postimees, Estonia’s Financial Intelligence Unit, or FIU, has revoked the licenses of roughly 70% of virtual currency companies operating in the country this year. Veiko Tali, the Deputy Secretary General of the Government Committee for the Prevention of Money Laundering and Terrorist Financing, said the remaining crypto firms also required “close attention” given the potential risks:

"We need to monitor the development of new technologies and manage the associated money laundering risks."

The media outlet stated that there are 400 crypto-related service providers remaining with the appropriate licenses in Estonia following the purge. The financial watchdog reported that 900 such firms operated in the country last year.

A major crackdown occurred in June, when the FIU revoked the licenses of 500 crypto firms in response to a $220 billion money laundering scandal in Estonia. Regulators withdrew the permits as the crypto companies had failed to start operations within six months of being licensed.

At the time, FIU head Madis Reimand called the financial watchdog’s actions the “first step in tidying up the market.”

In 2017, the country was seen by many as a crypto trailblazer with a series of laws seemingly intended to encourage exchanges and ICOs. However, the regulatory landscape in Estonia has since changed, and goes beyond the requirements of the EU’s 2019 Know Your Customer laws, making the path for licensed crypto firms attempting to comply with local regulations more difficult.