Estonia’s AML laws are set to clamp down on the crypto industry and the new guidelines will expand the definition of Virtual Asset Service Providers to include ICOs and Dapps as we are reading more today in our latest crypto latest news today.
At the start of February, Estonia’s AML laws will introduce a lot of changes to the definition of Virtual Asset Service PRoviders or VASPs to include the cryptos-related services with a move that will impact BTC ownership in the country as per the European compliance specialist Sumsub. The Estonian Ministry of Finance published a draft bill to update the Money Laundering and Terrorist Financing Prevention Act as a part of the country’s efforts to prevent money laundering and terrorist financing.
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
As the reports show, the legislation is in the interagency review process with an implementation that is set for February 2022. The regulated crypto companies have until March 18, 2022, to bring the operations and the paperwork into compliance. According to the new Defi CEO Mikko Ohtamaa, the law bans non-custodial software wallets as well as decentralized finance products in the country and that is because the bill’s provisions target VASPs that include crypto exchanges and wallets in Estonia. When the bill is ready, VASP will be extended to cover the decentralized platforms and ICO, and other services. Violation of these provisions could result in a penalty of up to $425,000.
According to Ohtamaa’s interpretation, the new law has the following effects as you are only allowed to hold your BTC in a custodial Virtual Asset Service Provider. The VASP can freeze your account so that it is not effectively your BTC anymore. Estonia was one of the first countries in the EU to license crypto businesses but it had to crack down after hundreds of billions of dollars worth of dirty money that was discovered in Danske Bank that positioned Estonia at the heart of Europe’s biggest money-laundering catastrophe.
The head of the Estonian Financial Intelligence Unit urged the government to turn on the rules to zero and start licensing all over again. He said that the general public is unaware of the risks of crypto especially around and its role in money laundering and terrorist financing as well as the vulnerability of the industry from cyber attacks.