Estonia, known for being a crypto-friendly country, has recently enforced stricter regulations (1) for cryptocurrency firms operating in the country. According to reports, Estonia’s Financial Supervision Authority (FSA) has revoked the licenses of over 1,000 virtual currency service providers, forcing around 400 companies to cease their operations in the country.
The move comes as part of Estonia’s efforts to curb money laundering and other illicit activities in the crypto industry. The new regulations require crypto firms to apply for a license and follow strict due diligence procedures, including the identification of clients and the prevention of money laundering.
Many of the affected crypto firms were reportedly registered in Estonia solely to take advantage of the country’s liberal cryptocurrency regulations. However, the FSA has stated that it will continue to regulate the industry, and those firms that are serious about complying with the new rules will still be able to operate in Estonia.
The crackdown has been met with mixed reactions, with some arguing that it is a necessary step to clean up the industry, while others see it as a blow to Estonia’s reputation as a crypto-friendly nation.
Estonia has been a popular destination for cryptocurrency firms due to its favorable tax policies and relatively easy registration process. However, the recent crackdown may lead to a shift in the industry, with companies now considering other countries such as Malta or Gibraltar, which have also become crypto hubs in recent years.
Overall, the move by Estonia’s FSA reflects the growing trend of governments around the world to regulate the crypto industry more closely. As the industry continues to evolve, it is likely that we will see more countries implementing similar regulations in an effort to combat money laundering and other illicit activities.