Ever since Bitcoin came to the forefront as the next big revolution in the financial space, the ecosystem around it has been mired in controversies. The latest reports have now shown that the integration of the crypto industry into national agencies was still not enough to keep the scammers away.
According to recent investigations by Estonia’s Financial Intelligence Unit, several foreign nationals involved in the country’s e-residency program have been involved in large-scale cryptocurrency exit scams. It is expected to act as a massive setback to the efforts of the Baltic nation to fix its image on the global front.
Estonia has played a pivotal role in the technology field over the past couple of years with citizens contributing to wildly popular applications like Skype. The 1.4 million-strong population was also the base for pioneering internet voting and opening the doors for online issuance of residency passes. The report by the FIA suggested that firms and e-residents based out of Estonia were linked to maintaining “suspicious initial coin offerings and the misappropriation of large sums within them”.
This report comes three months after another case in which Estonia was embroiled in a $220 billion mone laundering scandal. The issue forced regulators in the country to take swift action, cutting the crypto licenses of a large number of companies. Currently, only 353 cryptocurrency companies operating in Estonia, a small number compared to the 1234 firms active at the end of 2019.
Officials close to the e-residency program have stated that they would work with the police to get to the bottom of the latest scam. Investigations are expected to expose the details of all foreign nationals who use the e-residency program as a front for their nefarious activities. This was not how the program was supposed to work, at least in the words of former Estonian Prime Minister Taavi Roivas.
Roivas had claimed that the concept of e-residency was supposed to counteract the effects of the Soviet occupation years ago. The idea was that moving all information to a digital platform would reduce the chances of it being duplicated or replicated, like in the case with hard copies.