The Financial Intelligence Unit of Estonia has issued its first license to a cryptocurrency service provider under the country’s new regulatory framework that came into force in March 2022.

Striga Technology Issued the First License Under New Crypto Regulatory Framework

The Estonian Financial Intelligence Unit (FIU) this week announced that it had issued a license to Striga Technology OU to provide cryptocurrency services in the country:

Striga Technology OÜ is the first entrepreneur, who is authorized for the first time to provide a virtual currency service since the amendments of the Money Laundering and Terrorist Financing Prevention Act entered into force on 15 March 2022.

The FOI is an independent governmental agency under the jurisdiction of the Ministry of Finance with the goal of preventing money laundering and terrorist financing in the country. The firm which was issued the license is a subsidiary of Lastbit Inc. – a U.S. technology company.

Under the previous, less stringent framework, the Estonian FIU said that 318 licenses had been issued to crypto service providers since the beginning of the year. The Money Laundering and Terrorist Financing Prevention Act, which became active in March, strengthened regulations against virtual asset providers (VASPs) while assuring customers and traders in the region that they would not be affected. The Ministry of Finance said:

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 with wallets.

The just of the new law is that it requires VASPs to provide identities for their customer, but not private keys. Should a VASP not be able to provide identification, the provider is expected to “implement real-time risk analysis.” The legislation also amends those who are capable of obtaining approval to operate in the country as a VASP. The Ministry of Finance added:

Under new rules, the Financial Intelligence Unit can decline a license where the entity does not have any business operations in Estonia nor has any apparent connection to Estonia.

Finally, one of the most stringent requirements of VASPs under the new legislation is the addition of capital requirements, which makes it much more difficult for smaller companies to obtain approval to operate within Estonia.

VASPs will be required to have a minimum of 125,000 or 350,000 euros of share capital, depending on the type of service offered, increased from the current floor of 12,000 euros, the Ministry of Finance concluded.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.