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Estonia reviews crypto policy and revokes more than 1,000 crypto companies’ licenses

By Inkarias - 2020-12-16

With the multiplication of the number of existing crypto-assets on the market and the intrinsic decentralized nature of blockchain technology, it has become very easy to improvise as CEO to launch a new company and currency in a hidden way or not with only few regulations and documents needed in some countries. This is the case, for example, in England or Estonia, which have seen the number of companies created in these respective countries increase considerably in recent years. Digital currencies have become a source of passive income but also a source of problems such as fraud, money laundering or even more recently the frequent "rug pulls" of the DeFi scene., requiring a significant response and a stricter legal framework to ensure the reliability of the whole system. Estonia recently announced that over 1,000 cryptocurrency firms' licenses have been revoked in Estonia this year following deep researchs where most firms weren’t or minimally connected to Estonian ground with most clientele being from remote locations.

As specified by the finance ministry secretary-general Veiko Tali:

In 2020, the Financial Intelligence Unit has withdrawn more than 1,000 activity licenses of virtual currency companies. At the same time, there are still about 400 companies active in Estonia that offer virtual currency services. A number of important regulatory changes are planned for the services of virtual currencies in order to further regulate the field. 

These actions come in correlation with the Estonian government's desire to tighten the noose around fraudulent practices within the country while ensuring a safer and more secure space for new investors, also protecting quality companies with unambiguous legal activity. Veiko Tali´added that:

The monitoring and regulation of crypto service providers are in continuous need for heightened attention.