One of the most crypto-friendly countries in Europe, Estonia, is withdrawing licenses from a number of cryptocurrency firms following the biggest money laundering scandal in Europe. According to Bloomberg’s report, Estonian-based crypto firms are being cracked down by the authorities following a $200 billion money laundry scheme.
The Estonian Financial Intelligence Unit, Madis Reimand, stated that regulated Estonian-based crypto firms are taking advantage of their Estonian title to swindle finance elsewhere. As a result, more than 500 Estonian-based crypto firms that had previously failed to secure permits in the EU nation have lost their license within six months. He stated:
“This is a first step in tidying up the market, allowing us to take care of the most urgent issues by permitting operations only for companies that can be subjected to Estonian supervision and coercive measures.”
Estonia-based crypto firms purge fear
According to the report, Estonian authorities are targeting cryptocurrency firms in the country that did fail to establish operations six months after securing an operating license. Over 900 Estonia-based crypto firms fear to be stripped off their permit, given that they are running no business in the country and are run from foreign countries, according to Reimand.
Furthermore, the Estonian financial intelligence officer noted that authorities would continue upholding a firm procedure before issuing any company a license. According to Andre Nomm, the Baltic nation easily handed out crypto-related permits, resulting in the development of “credibility for some evil schemes.”
Estonia is obliged to comply with EU’s AMLD5 directive
Estonia is a member of the European Union. Since the adoption of the fifth Anti-Money Laundering Directive (AMLD5), Estonia-based crypto firms have been required to obtain licenses to provide crypto-related solutions.
The legal enhancements of the AMLD5 aim to improve the transparency and sustainability of the firms that engage in financial activities across Europe. Furthermore, the Estonian Financial Intelligence Unit recently introduced new requirements for crypto-related companies intending to start operations in the country. The new requirements are set to be enforced beginning July 1, 2020.