On December 11, 2019, the Estonian Parliament passed a new wording of the Money Laundering and Terrorist Financing Prevention Act. The changes primarily affect cryptocurrency service providers. The main purpose of the changes is to strengthen the position of the Financial Intelligence Unit in the licensing and supervision procedures for cryptocurrency companies.
The main changes are:
- the current two different licenses will be merged into one dual service license;
- regulation extends to the exchange of cryptocurrency for another cryptocurrency;
- the state fee for a new application increases from 345 € to 3300 €;
- the terms of eligibility criteria for “know your customer” and money laundering and terrorist financing prevention measures are equivalent to those for financial institutions;
- the registered office, place of business and management of the company must be in Estonia;
- the minimum share capital requirement is EUR 12,000 (currently EUR 2,500);
- the FIU has 60 days to take a decision on the license, with the possibility of extending it to 120 days (currently 30 days);
- stricter risk assessment of board members
The changes will take effect on March 10, 2020. Companies with valid licenses will need to bring their operations into compliance with the new requirements by July 1, 2020.
Therefore, existing licensed companies can start planning activities to adapt to the new requirements early in the summer. Businesses applying for a license would be in a hurry, as filing an application before March 10 would result in significant savings on the state fee.