Cryptocurrency licenses should be revoked in Estonia

Cryptocurrency operating licenses in Estonia should be revoked, and the system rebuilt from scratch, chief of the money laundering bureau (RAB) Matis Mäeker told investigative weekly Eesti Ekspress. Failure to do so may result in another Danske-style financial scandal.

Mäeker, who was appointed to the role in May this year,said the Estonian business of cryptocurrency operators of all hues amounted to tens of billions of euros per year, money which generally did not see its way back into Estonia’s economy, infrastructure or society, while the risks associated with the sector were “very, very high”, he told Eesti Ekspress in aninterview which appeared on its website(link in Estonian).

Under Mäeker’s proposals, the share capital of firms engaged in cryptocurrency activities would be raised to €350,000, and the operator should have this money in hand as cash or as low-risk, quick-selling securities, Eesti Ekspress reported. The current equity requirement for start-ups in the sector is €12,000, the paper said.

Cryptocurrency risk could be equated to the issues which ultimately led to the closure of the Tallinn branch of Danske Bank, Mäeker said, adding that if the state does not impose controls on these risks very quickly, consequences could follow which would be undesirable for the Estonian state.

Mäeker also expressed scepticism about the benefits for Estonia of the presence of many cryptocurrency operators, given their profits – sometimes astronomical sums as in the case of, for instance, cryptocurrency gambling outfits – are rarely ploughed back into Estonian infrastructure or society.

He said: “Their only goal is to get an Estonian license and use it to turn over very large sums, while Estonia gets nothing out of it.”

Read more: ERR.EE

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