The financial regulators in the Estonian Baltic country want to revoke all cryptocurrency exchange licenses in order to restart the entire regulatory regime.
Matis Mäker, Head of the Estonian Financial Intelligence Unit (FIU), has asked the state to “reduce regulation to zero and start licensing again”The local state news agency Eesti Ekspress reported on Wednesday.
Mäker stated that the public is unaware of the risks posed by the cryptocurrency industry. As a former head of the anti-money laundering department at the Financial Regulator and Resolution Authority, the official highlighted a number of related concerns, including illegal crypto activities such as money laundering and terrorist financing, and the vulnerability of the industry to hackers:
â € œThese risks are very, very high. We have to react fundamentally and very quickly. “
Approximately 400 companies in Estonia now have a Virtual Asset Service Provider (VASP) license, which is more than the total number of VASP licenses issued across the European Union, Mäker said. According to the official, these companies only use their licenses to “deliver very large sums of money while Estonia gets nothing”.
In its current state, the Estonian cryptocurrency industry neither creates jobs for the citizens nor does it bring “anything useful” to the country’s tax authorities.
Mäker suggested introducing stricter capital requirements for the industry, including the ability to force cryptocurrency companies to have at least 350,000 euros ($ 404,000) in cash or securities.. According to reports, the existing capital requirement for industry startups is just EUR 12,000 ($ 13,800).
The official also suggested requiring crypto companies to put in place more secure IT systems and forbidding them from accepting anything other than cash for investment in lieu of options like refinancing real estate, in order to increase investor protection.
As previously reported, The Estonian FIU launched comprehensive crackdown on cryptocurrency companies in June 2020 after revoking the licenses of around 70% of all VASPs in the country in December last year. According to Estonia Public Broadcasting, the regulator revoked a total of 1,808 VASP licenses in 2020.