The Estonian regulator or the Ministry of Finance said there are no plans to ban crypto with the new anti-money laundering legislation as we are reading more in our latest cryptocurrency news.
The Estonian regulator said that the new draft legislation for virtual asset service providers won’t ban customers from owning or even trading crypto but the requirements for VASPs could apply to decentralized wallet creators like hefty capital requirements. The statements came after the news spread that the new bill will ban decentralized finance and non-custodial wallets so the non-custodial wallet gives users full ownership of the crypto and private keys. The tweet referred to the new rules that were set out in a draft bill that was approved by the Estonian Parliament. In the statement, Estonia’s Ministry of Finance Keit Pentus-Rosimannus said that the bill is designed to enhance the anti-money laundering requirements and to reduce the creating of anonymous accounts. If it gets approved under the new law, Estonian VASPs will be required to identify customers when they offer accounts or wallets. The statement read:
“This means that the legislation does not contain any measures to ban customers from owning and trading virtual assets and does not in any way require customers to share their private keys to wallets.”
Offering a non-custodial wallet in Estonia comes with a fine up to €400,000 pic.twitter.com/NiJSqIdKhW
— Mikko Ohtamaa (@moo9000) December 31, 2021
The Ministry published an informational page with commonly asked questions about the new bill but according to the Ministry, the new bill is the perfect answer to the Financial Action Task Force guidance on regulating the VASPs. The publication noted that the Estonian Financial Intelligence Unit started licensing VASPs in 2017 but was lenient with the licensing requirements for crypto service providers. In 2020, the financial intelligence unit withdrew licenses from more than 1000 crypto companies because of poor connections to the country. With the new law, the Estonian-licensed VASP will need to operate in Estonia or to have a demonstrable connection to the country.
The new bill proposes even bigger capital requirements for VASPs and depending on the services, VASPs will be required to have a share capital of a minimum of 125,000 EUR. The proposed rules don’t apply directly to the users of private wallets that were not set up through the Estonian VASP. The Ministry also clarified that the new legislation uses the FATF definition of an ASP that includes crypto exchanges, issuers, and platforms that facilitate initial coin offerings. The FATF guidance also clarifies that Defi apps are not VASPs but say creators and owners can fall under the VASP definition.