The amendments to the Anti Money Laundering and Terrorism Financing Act were finally adopted and will be in force from the 10th of March 2020. These will seriously impact existing license holders and also new companies planning to apply.
Firstly, it is important to point out that existing license holders will have to comply with new rules from July 2020 so there is not a lot of room. Secondly, the state fee for the license will be 3300 euros in the future.
Now what are the changes all about.
1. The law does not differentiate between the 2 crypto licenses anymore - there is just one field of activity called "virtual currency service" and thus one license. When applying for the license, the applicant needs to specify the exact scope of the service.
2. Right now the main substantive check point for the FIU is the lack of wilful crime committed by the persons involved in the applicant. This will stay but more check points are added:
The owners, beneficial owners, board members, procurists have to have an impeccable business reputation - the applicant shall present all documents that support that, such as a comprehensive CV;
The place of operation, location of the board have to be in Estonia or a foreign company needs to have an affiliate in Estonia (that is managed from Estonia);
Payment/bank accounts of the applicant need to be in an Estonian or an EU payment institution. Information regarding such accounts shall be presented at the time of application;
The share capital of the applicant needs to be at least 12 000 euros and would have to be paid in at the time of application.
3. Also, the rules applicable to financing institutions will be applicable to virtual currency service providers which means more internal rules regarding for example identification. The existing company documents and procedures would definitely need to be updated.
4. Should existing license holders not present the data and documents needed to comply with new regulations by the 1st of July 2020 then the licenses shall be revoked.
It would seen that operating a foreign owned crypto company under Estonian licenses will become almost impossible.