The risks linked to virtual currencies have been highlighted by the authorities responsible for preventing money laundering as well as by the government committee.
The bill amends the requirements set for granting activity licences to virtual currency service providers in order to alleviate the risks of money laundering and the financing of terrorism, as well as other criminal activities in connection with these services.
The bill tasks the Financial Intelligence Unit with checking the background and suitability of the members of the board of the company (i.e. unblemished reputations) as part of the process of granting a virtual currency activity licence. The bill also requires the registered address of the company, the board, and the activities to be located in Estonia. Foreign companies must open a branch in Estonia to receive an activity licence.
In addition, the state fee of the virtual currency activity licence would increase from EUR 345 to EUR 3,300. The term for granting or denying a licence would be lengthened from 30 business days to 3 months.
The Minister of Finance stressed that the amendments were definitely not intended to stop the trade of cryptocurrencies in Estonia. “However, we must regulate the field much more thoroughly to prevent and combat risks related to money laundering.”
A company must apply for a virtual currency service provider activity licence if it wishes to provide the service of exchanging virtual currency for money, or vice-versa. A provider of a virtual currency wallet service must apply for an activity licence if it wishes to provide its clients virtual currency storing services.
A company that already holds an activity licence has until 31 December this year to take its activities into conformity with the new legal requirements and to submit additional information to the Financial Intelligence Unit.