The financial regulators of the Baltic country Estonia want to revoke all crypto exchange licenses in an attempt to restart the entire regulatory system.
Mattis Maker, head of the Estonian Financial Intelligence Unit (FIU), called on the state to “make regulations zero and resume licensing”.
The maker claimed that the public is ignorant about the risks of the cryptocurrency industry. Former head of the Money Laundering Division of the Financial Supervision and Resolution Authority, the official mentioned a number of related concerns, including illegal crypto activity such as money laundering and terrorist financing, as well as vulnerabilities in the industry for hacking. Saying:
“These risks are very, very high. We need to respond cardinally and very quickly. ”
About 200 companies in Estonia now hold Virtual Asset Service Provider (VASP) licenses, more than the total number of VASP licenses issued in the European Union. According to the official, such businesses only use their licenses to “refund very large sums of money, on the other hand Estonia gets nothing from it.”
In its current state, the Estonian crypto industry does not create jobs for citizens or contribute “anything significant” to the country’s tax authorities.
The maker proposed the introduction of stricter capital requirements for the industry, which would oblige crypto companies to have at least ৫ 50,000,000 (০ 400,000,000) in cash or securities. The existing equity required for starting a business is only 12,000 euros (13,800).
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The official further suggested that crypto companies should set up more secure IT systems and prohibit investors from accepting solid cash for investments instead of the option of refinancing assets to increase security.
As previously reported, the Estonian FIU revoked the licenses of about 0% of all VASPs in the country in December last year and launched a major crackdown on crypto companies in June 2020. According to Estonian Public Broadcasting, the regulator revoked a total of 1,808 VASP licenses in 2020.