Around 200 licenses were withdrawn by the firms themselves, and around the same number was rejected by the country’s Financial Intelligence Unit, which has been charged with implementing a 2022 law that requires companies to keep hefty capital reserves and genuine links to Estonia.
“In renewing authorizations, we saw situations that would surprise every supervisor,” Matis Mäeker, director of the Financial Intelligence Unit, said in a statement, adding that “suspicious circumstances” on applications sometimes suggested links to unlawful activities.
Applications showed individuals appointed to management boards without their knowledge, or using falsified credentials. Documentation was often identical between different companies because many of them had used the same cluster of legal and professional service firms, the FIU said.
“Soon, we can return to normality in terms of supervision, where we will be moving largely from assessment on paper to daily on-site supervision,” added Mäeker, who previously told CoinDesk that the law requires “hippie-like” crypto projects to professionalize.
Home to digital unicorns like Wise, Bolt and Skype, Estonia has also sought to repair its reputation after a scandal involving the laundering of Russian funds through the Tallinn branch of Danske Bank. As a member of the European Union, the country will also soon have to implement the bloc’s Markets in Crypto Assets regulation, which requires wallet providers and exchanges to gain a license.
A recent evaluation of Estonia’s anti-money laundering efforts by international standard-setters Moneyval “is tremendous work for the entire country as well as the FIU,” Maeker told a March 29 conference. “Hopefully, it also closes the book on our banking sector and our banking sector scandals – I think it will, it did.”
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