Recently the Estonian FIU issued new guidelines for the establishment of licensed crypto exchange platforms in Estonia. These guidelines are aimed at creating one license for crypto exchanges in Estonia, unlike the current system that offers two licenses- the E-Wallet license and Virtual Currency Exchange license.
These changes have impacted existing businesses in Estonia not only within the AML framework, but also within the corporate structure of the same companies. It is crucial for companies that wish to continue operating in Estonia and in the EU to comply with the new requirements, or they risk the loss of their license.
Crypto exchanges will find that is not possible to continue with the previous AML corporate framework within the scope of the new license requirements.
As of July 1st 2020 the crypto exchange companies that hold both licenses, virtual currency exchange and e-wallet license, will have to be fully compliant with the new framework. As part of the new framework both licenses are combined into one crypto exchange license, which will need to be supported with a new AML compliance measures.
These measures which include a physical address in Estonia (operational branch- in comparison to just a virtual address) in case of a foreign entity operating the platform, a local AML officer and director with Estonian residency, an increase in the share capital to 12,000 EUR, a bank account in the European Economic Area (EEA), and additional criteria.
Furthermore, the Estonian FIU is able to decide on additional measures that it deems appropriate under the new framework, as invitations for interviews for the purpose of assessing the compatibility of the new AML staff and directors, and additional measures that the FIU deems appropriate.
The purpose of the new framework stems from the 5th AML Directive, which has completely changed the EU Market to an indistinguishably new Market that is facing unchartered waters, specifically within the realm of AML.
Crypto Exchanges operating and licensed in Estonia are encouraged to adapt to the new framework, or risk revocation of their license.
Author: Ella Rosenberg