Estonia’s new AML laws set to crack down on the crypto industry


Starting in February, Estonia is set to introduce sweeping changes to its definition of Virtual Asset Service Provider, or VASP, to include several cryptocurrency-related services – a move that could impact Bitcoin (BTC) ownership in the country – according to the European compliance specialist. Sumsub.

On September 21, the Estonian Ministry of Finance released a bill to update the Prevention of Money Laundering and Terrorist Financing Act (Anti-Money Laundering Act) as part of the government’s efforts to prevent money laundering and terrorist financing.

As Sumsub reported, the legislation is now under interagency review, with implementation slated for February 2022. Regulated crypto companies have until March 18, 2022 to bring their operations and documents into compliance.

According to New DeFi CEO Mikko Ohtamaa, the updated law effectively bans non-custodial software wallets, as well as decentralized financial products, in the country. This is because the provisions of the bill target VASPs, which include crypto exchanges and wallets, in Estonia. When the invoice is ready, VASP will be extended to cover decentralized platforms, initial parts offerings and other services. Violation of the provisions may result in a fine of up to $ 452,000, or 400,000 euros.

According to Ohtamaa’s interpretation, the new law has the following effect: “You are only allowed to keep your Bitcoin in a Virtual Asset Service Provider (VASP). VASP may freeze your account. It is therefore no longer effectively your Bitcoin. “

Related: Estonia’s crypto honeymoon ends as stricter regulations loom

Estonia was one of the first countries in the European Union to license cryptocurrency companies, but had to crack down after hundreds of billions of dollars in dirty money were discovered in Danske Bank, placing Estonia at the heart of the biggest money laundering in Europe. disaster.

As Cointelegraph reported, Matis Mäeker, head of the Estonian Financial Intelligence Unit (FIU), urged the government in October to “reset the rules and restart the licenses”. He said the general public is unaware of the risks inherent in cryptocurrency, especially with regard to its alleged role in money laundering and terrorist financing, as well as the vulnerability of the industry. cybercriminals.



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