Financial regulators in Estonia are considering whether to revoke all crypto exchange licenses in an effort to start the entire regulatory regime from scratch.
Matis Mäeker, the director of Estonia’s Financial Intelligence Unit (FIU), has said to “turn the regulation to zero and start licensing all over again,” Eesti Ekspress reported on Wednesday.
“We will toughen our supervision, we will toughen our approach which concerns the market entry. We were the first country to regulate them, this was a gateway for them to have a license because no one licensed them.”
According to Mäeker, about 400 companies in Estonia hold a virtual asset service provider (VASP) license, which is more than the total VASP licenses granted in the entire European Union. According to the official, such businesses only use their licenses to “turn over very large sums, while Estonia gets nothing out of it.”
Due to this, the Estonian crypto industry neither creates jobs for citizens nor contributes “anything significant” to the country’s tax authorities, he claimed.
Later, the Financial Intelligence Unit said it is not considering an automatic cancellation of all previously issued licenses for crypto-related activities and added that it supports the upcoming regulations which will also increase its own powers in the authorization process.
In June 2020, the Estonian FIU started a major crackdown on crypto companies having revoked the licenses of roughly 70% of all VASPs in the country by December last year. Per the Estonian Public Broadcasting, the regulator revoked a total of 1,808 VASP licenses in 2020.
Earlier this year, officials hinted that they were planning to introduce even stricter regulations. A new bill has been drafted by the Finance Ministry and is currently being discussed with other institutions. The legislation is likely to introduce higher capital requirements and annual audits for crypto companies along with due diligence thresholds on transaction volumes.