Compliance Expertise For Crypto Entrepreneurs in Estonia

Cryptocurrencies have been around for a while now, but it is only just recently that regulations all over the world have started to evolve, and governments started to tailor their approaches in dealing with virtual assets. If you are interested in finding a jurisdiction that has experience in dealing with blockchain technology, then Estonia might just have the clear and crypto-friendly environment you are looking for!

Estonia is among the few countries in the world that has clearly defined rules that cryptocurrency businesses must follow which also provides a higher level of transparency and security to the customer. It is no secret that Estonia has been one of the favorite jurisdictions for cryptographic license applicants because of that.

Unfortunately, in addition to the obvious positive values for the entire crypto community, Estonia had also managed to attract those who did not do business with the best intentions and in a fair way by taking advantage of the learning and development process of the Estonian legislation regarding virtual asset service providers.

As a result, on the 15th of March, 2022 the new laws that regulate virtual asset service provision in Estonia entered into force with the primary objectives to lower the risks of money laundering in the virtual assets sector, improve transparency and strengthen the local authority’s competences in licensing and supervision processes.

Numerous service providers in Estonia advised their customers to move to the Lithuanian jurisdiction as there are currently looser requirements for crypto companies than in Estonia. However, Lithuania is already moving towards a more regulated policy due to the advances of regulations all over the world.

The draft law, which should be submitted to the Lithuanian parliament during the current session and enforced this year, is expected to introduce more detailed rules for customer identification and impose a ban on the opening of anonymous accounts.

Throughout all this debate about regulatory matters, a misunderstanding can easily arise that all crypto business is exclusively regulated by local jurisdiction and crypto enthusiasts need a license to deal with crypto at all.

Fortunately, this is not the case in Estonia. In addition to services that do require some form of authorization from the Estonian government, there are business models that do not require a license at all to deal with virtual assets.

These are currently trendy NFT projects, crypto mining businesses, setting up a company to invest in crypto for own use, or, for example, issuing utility tokens.

While these businesses in most cases do not need a license in Estonia, their business models must still be carefully analyzed and the overall compliance with the effective AML/KYC regulations evaluated.

Considering our extensive experience with legal compliance and the overall developments in our jurisdiction and elsewhere, we offer our professional advice to those, who with to obtain a license for their business and to those crypto enthusiasts who need expert legal advice, corporate and accounting services, to start their own project in Estonia.

We are eager, available, and open to discuss your requirements – reach out to us!