Estonia’s new anti-money laundering law will crack down on the crypto industry

Beginning in February, Estonia will completely change its definition of virtual asset service providers (VASP) to include multiple cryptocurrency-related services-this move may affect Bitcoin (Bitcoin) Ownership in the country— according to European compliance expert Sumsub.

On September 21, the Estonian Ministry of Finance issued a draft bill to update the Anti-Money Laundering and Terrorist Financing Prevention Act (AML Act) as part of the government’s efforts to prevent money laundering and terrorist financing.

As reported by Sumsub, the legislation is currently in the inter-agency review process and will be implemented in February 2022. Regulated crypto companies must make their operations and paperwork compliant by March 18, 2022.

According to Mikko Ohtamaa, CEO of New DeFi, the updated law effectively bans non-custodial software wallets and decentralized financial products in the country. This is because the terms of the bill target Estonia’s VASP, including cryptocurrency exchanges and wallets. After the bill is ready, VASP will expand to decentralized platforms, initial token issuance and other services. Violation of the regulations may result in a fine of up to 452,000 USD or 400,000 Euro.

According to Ohtamaa’s explanation, the new law has the following effect: “You can only hold bitcoins in a managed virtual asset service provider (VASP). VASP can freeze your account. So it’s no longer your bitcoin.”

related: With stricter regulations approaching, the cryptocurrency honeymoon period in Estonia is coming to an end

Estonia was one of the first countries in the European Union to approve cryptocurrency business, but after Danske Bank found hundreds of billions of dollars in dirty money, it had to crack down. position Estonia is at the center of the biggest money laundering disaster in Europe.

According to Cointelegraph, Matis Mäeker, head of the Estonian Financial Intelligence Unit (FIU), Urge the government in October “Return the rules to zero and restart licensing.” He said that the public does not understand the inherent risks of cryptocurrency, especially its alleged role in money laundering and terrorist financing, and the industry’s vulnerability to cybercriminals.