- Following concerns over money laundering, regulators in the tech-friendly nation have decided to resume their normal monitoring practices, abandoning the strict approach they had adopted:
Data released by Estonia’s money-laundering regulator on Monday reveals that the implementation of a controversial crypto law has resulted in an approximately 80% decrease in the number of registered firms in the country.
Approximately 200 licenses were voluntarily withdrawn by the firms themselves, while a similar number of licenses were rejected by Estonia’s Financial Intelligence Unit. The unit is responsible for enforcing a law implemented in 2022, which mandates companies to maintain significant capital reserves and demonstrate genuine connections to Estonia.
Matis Mäeker, the director of the Financial Intelligence Unit, stated that during the renewal of authorizations, they encountered surprising situations that would astonish any supervisor. He further explained that certain applications exhibited “suspicious circumstances” that indicated potential associations with unlawful activities.
The Financial Intelligence Unit (FIU) discovered concerning practices during the application process. These included instances where individuals were designated to management boards without their consent or with falsified credentials. Additionally, the FIU noted that many companies had utilized the services of the same group of legal and professional firms, leading to identical documentation across different companies.
Matis Mäeker expressed that they anticipate a return to normal supervision procedures, shifting from primarily paper-based assessments to daily on-site supervision. He emphasized the need for crypto projects to transition from a more informal approach to a more professionalized and regulated framework as mandated by the law.
Estonia, known for being the birthplace of digital success stories like Wise, Bolt, and Skype, has been working to restore its reputation following a scandal involving the laundering of Russian funds through Danske Bank’s Tallinn branch. As an EU member, Estonia will soon need to adopt the Markets in Crypto Assets regulation, a set of rules that mandate licensing for wallet providers and exchanges operating within the bloc.
During a conference on March 29, Matis Mäeker expressed that the recent evaluation of Estonia’s anti-money laundering efforts by Moneyval, an international standard-setting body, was a significant achievement for the entire country, including the Financial Intelligence Unit (FIU). He stated that he hopes the evaluation will mark the end of the country’s banking sector scandals, bringing closure to that chapter.
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