Estonia's anti-money laundering chief wants cryptocurrency licenses to be revoked
Matis Mäeker has asked the government to scrap all the virtual asset service provider (VASP) licenses given to crypto exchange and to rebuild the system from scratch
Even though Estonia is a number one destination for cryptocurrency projects globally, its chief of the money laundering bureau (RAB) Matis Mäeker has asked the government to scrap all the virtual asset service provider (VASP) licenses given to crypto exchanges.
Mäeker, while speaking to the investigative weekly Eesti Ekspress, said that Estonian business of cryptocurrency operators amounted tens of billions of euros per year, money which generally did not see its way back into Estonia's economy, infrastructure or society, while the risks associated with the sector were very, very high.
As per an estimate, over 400 cryptocurrency operators are still active out of 1808 cryptocurrency exchanges, which were revoked in 2020.
Mäeker has recommended to the government that VASP operating licenses in Estonia should be revoked and the system should be rebuilt from scratch. All the licenses must be revoked and fresh licenses must be given under the new plan.
In his new plan, he has suggested raising the share capital of firms engaged in cryptocurrency activities to $404,000 from the current $13,800 required for any startup to start operations.
The operator should have this money in hand as cash or as low-risk, quick-selling securities, he adds.
Cryptocurrency risk could be equated to the issues which ultimately led to the closure of the Tallinn branch of Danske Bank, Mäeker said, adding that if the state does not impose controls on these risks very quickly, consequences could follow which would be undesirable for the Estonian state.
Mäeker also said that many cryptocurrency exchanges have benefited from Estonia, but profits of these exchanges’ earnings are rarely ploughed back into Estonian infrastructure or society.
Crypto companies need to set up more secure IT systems and prohibit them to accept anything but hard cash for investment instead of options such as refinancing property in order to increase investor protection, the official stressed.
With a population of just 1.3 million, Estonia has around 400 companies that hold a cryptocurrency provider's license, a figure higher than the rest of the EU combined.
As per BNS report, Singapore, which is one of the world's key financial centers, has issued only one such license to date, while the UK has issued only 12 licenses and Malta, well-known as a center for online gambling, both physically on-site and in the issuing of licenses to companies based elsewhere, has issued less than 20.