In 2017, the Estonian government shook the legislative side of cryptocurrency by introducing a series of new laws designed to support crypto projects. These licenses fall into two categories: those who want to work with cryptocurrency exchanges, and those who want to offer the main currency. Both types of companies benefited from the first “real” digital currency licenses anywhere in the world.
As a result of these licenses, business people have digitally switched to a small but large Baltic state. The Estonian government has been promoted in several ways. The country was not only a leader in obtaining code licenses, but also provided an opportunity for residents of any country to obtain a “digital residence”. This digital stay has allowed businessmen to find their or their company in Estonia in the legal sense, thereby greatly simplifying the receipt of the necessary encryption licenses, even if they work in other countries of the world.
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This very modern combination of digital residence and the ability to work with licensed cryptocurrencies impressed almost everyone in cryptocurrency – especially those who are looking for openness and security. In total, about 2,000 companies received cryptocurrency licenses only half a year ago since Estonia began issuing them (this number depends on all issued cryptocurrency licenses).
Three years before January 2020, the Estonian government began to publish new rules for licensed companies and those who wish to apply for cryptocurrency licenses – laws that change the landscape and comply with the cryptocurrency licenses offered by Estonia.
These new measures were strategically implemented as a result of the adoption of new EU laws “Know Your Client”, which lawmakers approved last year. In short, these new laws require member states to regulate digital currency companies. The overall goal of these new laws is to stop money laundering in a relatively unorganized industry; Regulators and financial authorities often call this their main concern for cryptocurrencies in general.
However, many observers have indicated that Estonian laws already comply with the new EU requirements. So why did they introduce the new rules?
According to the “old” licensing laws, the companies that applied for the license had to appoint the person responsible for the KYC process – in fact, a compliance officer. This person must submit a certificate from his local police department to confirm a clean background. In addition, there was a requirement that at least one of the leaders be a resident of the EU, and the Estonian company had a registered address in Estonia. These standard requirements for financial licensing are tempting, especially if the cost of their acquisition is only about $ 400.
When the new EU laws are combined with the old Estonian laws, you can see that they work almost in parallel with their requirements.
Nevertheless, new Estonian laws impose very cumbersome and complex regulatory obligations for companies that want to regulate themselves in coding. It seems that Estonia has made a serious turn for those who tried to attract these licenses. If the old Estonian licensing laws are intended to attract new companies with a limited budget, the new licensing laws are designed to prevent them.
The obligations of companies that want to retain or obtain a license for the Estonian code now include items such as the local manager and local office, and $ 3,700. This is quite a big difference from previous prices and obligations of the company. These new requirements do not in themselves seem burdensome.