Five Hundred Cryptocurrency Firms in Estonia Lose Permits
In Europe, the focus has turned to cryptocurrency companies due to the discovery of the continent’s biggest-ever dirty-money ($220 billion) scandal in Estonia.
Estonia has been clamping down on the companies towards the prevention of financial crime. This is due to allegations that billions of dollars of illegal cash flowed through the local unit of Denmark’s largest lender Danske Bank A/S.
One of the steps taken by the government of Estonia is the withdrawal of permits from several cryptocurrency firms. The government focuses on firms that exchange and assist clients with holding digital currencies such as Bitcoin. This is happening despite Estonia being one of the first in the EU to license cryptocurrency firms in late 2017.
In the words of Madis Reimand, the head of the Baltic country’s Financial Intelligence Unit, regulators are concerned about the companies using their local credentials to assist people commit fraud elsewhere; hence, this year, they have withdrawn the permits of over five hundred (75 percent of total) firms which had failed to start operations in Estonia within six months of being licensed.
The unit, headed by Reimand, cited cases of suspected embezzlement of clients or provision of financial services abroad without proper authorization. The country’s parliament was able to enact stricter licensing rules after warnings from supervisors about increasing issuance since 2018.
Reimand said this was the initial step towards cleaning the market, thereby permitting them to handle the most urgent by allowing only firms that can be subjected to Estonian supervision and coercive measures to operate.
He continued that the purge is still on, as stricter licensing measures are on the way. There is possibility of over fifty percent of Estonia’s remaining cryptocurrency firms losing their licenses because they are not operating in the country and their managers are outside the country.