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The government of Estonia has greenlit a bill aimed at regulating cryptocurrency service providers, a move reported by state-run media outlets. However, the bill must still pass through a parliamentary vote before it becomes law.
According to the proposed legislation, cryptocurrency service providers would fall under the supervision of the Financial Supervision Authority (FSA). Presently, these providers are registered and monitored by the Financial Intelligence Unit (FIU), adhering to the Anti-Money Laundering (AML) regulations of Estonia.
<h2 id="span-style-font-weight-400-estonia-brings-in-a-new-law-span">Estonia Brings in a New Law</h2>
The FSA is set to commence issuing licenses in 2025, with existing FIU license holders mandated to transition to FSA licensing before the year’s end. The Finance Minister of Estonia Mart Võrklaev expressed confidence in the process,<a href="https://news.err.ee/1609289883/estonia-introduces-legislation-to-regulate-cryptocurrency-providers" rel="noopener noreferrer nofollow"> stating</a>,&nbsp;
“I believe that anyone who takes this seriously and wishes to provide a service will also be able to obtain a new license from the Financial Supervisory Authority.”
<h3 id="span-style-font-weight-400-substantial-changes-in-penalties-span">Substantial Changes in Penalties</h3>
The bill introduces substantial changes in penalties for AML violations. While the current national law imposes fines capped at 40,000 euros ($43,450), the proposed legislation allows for fines of up to 5 million euros ($5.2 million).
Võrklaev announced that the bill, yet to be translated into English, was submitted to the government last week. Its approval by the government is the next procedural step before it heads to the Riigikogu, the Estonian parliament, for voting.
<h2 id="span-style-font-weight-400-estonia-aligns-with-mica-regulations-span">Estonia Aligns with MiCA Regulations</h2>
This legislative move aligns Estonia with the<a href="https://thecoinrise.com/mica-framework-signed-into-law-by-eu-officials/" rel="noopener noreferrer nofollow"> European Union’s Markets in Crypto-Assets (MiCA) regulations</a>.&nbsp;
Additionally, it modifies the securities prospectus requirement, raising the threshold for detailed prospectus preparation from 5 million euros to 8 million euros ($86.9 million) for companies seeking capital through shares or bonds.
<h3 id="span-style-font-weight-400-licensing-of-crypto-firms-span">Licensing of Crypto Firms</h3>
Estonia’s reputation as a crypto-friendly jurisdiction dates back to 2017, when it enacted legislation offering favorable conditions for crypto firms, including easy registration and e-residency. However, in 2020, Estonia tightened its regulatory stance following a non-crypto-related corruption scandal.&nbsp;
The number of licensed crypto firms plummeted from 1,234 in late 2019 to 353 by September 2020, with 500<a href="https://thecoinrise.com/estonia-on-the-track-of-revoking-all-crypto-exchange-licenses/" rel="noopener noreferrer nofollow"> licenses revoked for failing to commence operations</a> within six months of registration.
Continuing regulatory adjustments followed, with almost 400 virtual asset providers either closing or being shut down after stricter AML requirements were imposed in late 2021.&nbsp;
This recent bill reflects Estonia’s ongoing efforts to balance regulatory oversight with maintaining a conducive environment for cryptocurrency innovation and investment.
The post <a href="https://thecoinrise.com/estonia-to-regulate-crypto-service-providers-via-new-bill/" rel="noopener noreferrer nofollow">Estonia to Regulate Crypto Service Providers via New Bill</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

Estonia to Regulate Crypto Service Providers via New Bill

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