Financial regulators in Estonia, the Baltic state, want to cancel all crypto-exchange licenses to restart the entire regulatory system.
As local state news agency Eesti Ekspress reported on Wednesday, Matisse Meeker, head of the Estonian Financial Intelligence Unit (FIU), called on the country to “reset regulations and start licensing again.”
Macker stated that the public is not aware of the dangers of the cryptocurrency industry. The official, who was previously the head of the Money Laundering division of the Financial Conduct and Dispute Resolution Authority, highlighted a number of related issues, including illegal crypto activity such as money laundering and terrorist financing, as well as industry vulnerability, and stated:
These risks are very, very high. We have to react very, very quickly. ”
Mäeker said about 400 companies in Estonia are currently licensed as a Virtual Asset Service Provider (VASP), which is more than the total number of VASP licenses issued across the European Union. According to the official, these companies only use their licenses “to trade very large sums, and Estonia receives none of this.”
According to him, in the current situation, the Estonian crypto industry does not create jobs for its citizens and does not contribute “anything important” to the country’s tax authorities.
Macer proposed stricter capital requirements for the industry, including potential requirements for crypto companies to have at least 350,000 euros ($404 thousand) in cash or securities. The current capital requirement for industrial startups has been reported to be only €12,000 ($13,800).
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The official also suggested requiring crypto companies to build more secure IT systems and banning them from accepting anything other than cash as an investment in lieu of alternatives such as real estate refinancing to increase investor protection.
As previously reported, the Estonian Financial Intelligence Unit began serious harassment of crypto companies in June 2020, after revoking the licenses of about 70% of all VASPs in the country by December last year. According to Estonian Public Radio, the regulator canceled a total of 1,808 VASP licenses in 2020.