When Estonia introduced a license specifically for cryptocurrency exchanges in November 2017 it was groundbreaking, and Estonian cryptocurrency licenses, issued by the Estonian Financial Intelligence Unit or FIU for short, continue to be sought after, since the government is extremely supportive of the cryptocurrency industry in general, allowing many companies within the industry to really thrive and for truly innovative thinking.
Porat Group has extensive experience with these licenses, having assisted over 50 companies successfully obtain FIU cryptocurrency exchange licenses so far, making us a top choice for companies interested in these licenses and the regulatory process in Estonia.
Until recently 2 different financial licenses were required for those wanting to operate a licensed cryptocurrency exchange in Estonia, the Virtual Currency Exchange Service License, and the Virtual Currency Wallet Service License but in 2020 the two separate licenses were united into one single license, simplifying the regulation process.
The most important thing to know if you are interested in regulating your cryptocurrency exchange business in Estonia is that you will be required to open a local branch of a foreign company or a company in Estonia to do so, and the center of management of the business in question is required to be in Estonia.
The company must have at least one shareholder and one director (can be the same person and these can be non-residents of Estonia, however one of the board members must be the company’s representative in Estonia). All board members and AML (Anti Money Laundering) officers must fit the “Fit and Proper” criteria of the FIU in terms of having adequate knowledge of AML regulation.
During the regulatory process, the FIU is allowed to invite the AML officer to a personal meeting if needed. During this meeting, the purpose is to confirm that the AML officer indeed has the necessary knowledge of AML rules and Estonian laws required. If the officer is called to such a meeting by the FIU, the officer has a 60 day period to show up to the meeting.
The minimum share capital requirement is 12 000 euros (cannot be denominated in cryptocurrencies) and the new application fee for each application is 3300 euros.
Besides Estonia being a true pioneer in the cryptocurrency and Fintech industries, some other advantages of this jurisdiction are:
In order to obtain the Estonian cryptocurrency exchange license the following documents must be submitted to the Estonian Financial Intelligence Unit (FIU):
The documents can be submitted in either English or Russian, and each document must be certified with an apostille that can not be older than max. 3 months.
The regulator may also request additional information as needed, such as CVs for the involved persons, business plans etc.
If the above sounds suitable for your cryptocurrency exchange and you think an Estonian license might be a good option for you, the lawyers at Porat Group would be happy to tell you more about it, as well as explain how an Estonian cryptocurrency exchange license compares to other similar licenses.
Naturally we can also take a hands on approach to the entire regulatory process if you decide to apply, as we have with over 50 companies who have already obtained the license successfully through us.
We are also able assist with introductory services to banks, payment providers and other service providers as needed.