Obtaining permission for activities related to cryptocurrency
Among specialists, Estonia is considered the country where it is easiest and fastest to obtain a license to work with cryptocurrency. Nevertheless, there are strict regulations for obtaining permission to operate, as well as carrying out activities related to cryptocurrency.
The updated Anti-Money Laundering and Terrorist Financing Prevention Act, which entered into force in November 2017, introduced the concept of ‘virtual value’ (virtuaalvääring or virtual currency) into legislative regulation, which in its content meets all the signs of a cryptocurrency.
According to Article 3 of the said law, a virtual value is a value presented in a digital form, which can be digitally transferred, stored and sold, and which individuals and legal entities accept as a means of payment, but which is not monetary or legal tender of any states. In turn, the service related to the circulation of virtual values means the service of exchanging virtual values for fiat and vice versa, as well as the service of a wallet for virtual values.
Therefore, all legal entities that wish to provide such services in Estonia shall obtain an activity or a cryptocurrency license from the Money Laundering Data Bureau of the Estonian Police and Border Guard Board. Activity licenses from this Bureau shall also be obtained by market participants providing services to certain financial institutions, limited partnerships, pawnshops, providing contact person services or providing a legal address to commercial partnerships, as well as buyers of precious metals.
A legal entity applying for a license for the circulation of virtual assets shall meet at least the following conditions: the owners and members of the board shall have an impeccable reputation; the firm shall be registered in Estonia and the seat of its board and activities shall be in Estonia; an account has been opened with a credit institution established in Estonia or another EU Member State, with an electronic money institution or with a payment system; the amount of the contributed share capital is at least EUR 1200.
Obtaining a license involves submitting a relevant application to the Money Laundering Data Bureau through the eesti.ee system or a notary. Starting March 10, 2020, there are no other ways to submit an application. An integral part of the application is the company’s internal procedural rules and internal control procedures, which establish the principles of the AML and KYC procedure. The entire package of documents is submitted for verification to the supervisory authority, which makes a decision on granting a license within 60 days.
Our experienced lawyers are ready to provide legal support and counselling in obtaining licenses of varying complexity and area. The package of documents developed by us has been verified by the Bureau, because the clients who applied to us successfully obtained the necessary licenses on the basis of these documents.