The Estonian government has approved a bill aimed at regulating crypto service providers. However, the bill must pass a vote in Congress to become law. Under the proposed legislation, crypto service providers would be subject to the supervision of the Financial Supervisory Authority (FSA).
These providers are now registered with the Financial Intelligence Unit (FIU) and must comply with anti-money laundering (AML) regulations. If the bill becomes law, the Financial Services Agency will begin issuing licenses in 2025, and existing FIU license holders will need to apply for an FSA license by the end of the same year. Estonia's Finance Minister Mart Volklaev expressed confidence in the licensing process, saying that companies serious about providing services will be able to obtain the necessary licenses from the Financial Supervisory Authority.
Under current domestic law, fines for AML violations can reach up to 40,000 euros ($43,450). However, if the new bill becomes law, they could face fines of up to 5 million euros ($5.2 million). Volklaev announced last week that he had submitted the bill to the government, and it is now awaiting government approval before it is submitted to Estonia's parliament, the Riigikogu, for a vote.
The bill aims to align Estonia with the European Union's Markets in Cryptoassets (MiCA) regulations and will also amend securities prospectus requirements. Estonia introduced legislation favorable to crypto companies in 2017, simplifying the registration process, including e-residency, and establishing itself as a crypto-friendly jurisdiction. However, the country tightened regulations in 2020 following non-cryptocurrency-related corruption scandals.
