According to recent data released by Estonia’s money-laundering regulator on Monday, the implementation of a controversial crypto law has led to an approximately 80% reduction in the number of registered firms in the country. The Financial Intelligence Unit (FIU) of Estonia, responsible for enforcing the 2022 law, revealed that around 200 licenses were voluntarily surrendered by the firms themselves, while a similar number of applications were rejected. The new law mandates that companies maintain substantial capital reserves and establish genuine connections to Estonia.
Matis Mäeker, the director of the Financial Intelligence Unit, expressed surprise at some of the situations encountered during the renewal of authorizations, stating that certain applications exhibited suspicious circumstances that hinted at possible links to illicit activities. Instances were discovered where individuals were appointed to management boards without their knowledge or through the use of falsified credentials. The FIU also noted that documentation submitted by different companies often displayed striking similarities, indicating that many of them had relied on the services of the same group of legal and professional firms.
Mäeker emphasized that with the progress made in terms of supervision, the focus would soon shift from paper assessments to daily on-site supervision. He had previously remarked to CoinDesk that the crypto law aimed to professionalize what he referred to as “hippie-like” crypto projects.
In addition to grappling with the challenges posed by the crypto sector, Estonia has been working to restore its reputation following a scandal involving the laundering of Russian funds through the Tallinn branch of Danske Bank. As a member of the European Union, the country is also obligated to implement the bloc’s Markets in Crypto Assets regulation, which necessitates that wallet providers and exchanges obtain a license.
During a conference on March 29, Matis Mäeker referred to a recent evaluation of Estonia’s anti-money laundering efforts conducted by international standard-setters Moneyval, describing it as an important achievement for both the country and the FIU. He expressed his hope that the evaluation would bring closure to the banking sector scandals and restore trust.