Cryptocurrency license in Estonia

Estonia is one of the first jurisdictions in the European Union where public authorities began issuing appropriate licenses to cryptocurrency companies. This happened in 2017. Today, mining, ownership and storage of digital currencies, initial coin offering (ICO), purchase, exchange and sale of cryptocurrencies are allowed in this country. Estonia is considered a country friendly to the crypto industry, but the state tightly controls the work in this area.

The main regulatory body in the field of cryptocurrency activities is the Estonian Financial Intelligence Unit (FIU), the Estonian Financial Supervisory Authority (EFSA), and the Money Laundering Data Bureau are in charge of the operation of crypto companies in the country.

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COREDO takes a comprehensive approach to solve problems and offers its clients a full package of services, which includes:

assistance in registering a company in Estonia;
preparation of necessary documents;
applying for a cryptocurrency license;
legal support of the company up to obtaining a license.

The state fee is paid separately to the Estonian Ministry of Finance; its amount is 10.000 EUR.

Benefits of obtaining a crypto license in Estonia

Until March 2020, the legislation provided two types of licenses for crypto services in Estonia. Still, more recently, the FIU issues a single license called the “Virtual Currency Service Provider License”. This change somewhat simplifies the activities of cryptocurrency companies, expands their capabilities, reduces additional costs and simplifies the filing of an application. Estonian laws provide a seamless process for applying for a cryptocurrency license for local entrepreneurs and non-residents.

Among the advantages of obtaining a crypto-license precisely in Estonia are:

protection of cryptocurrency companies at the legislative level;
the most modern system of regulation of the cryptocurrency sphere in comparison with the other countries of the European Union;
a higher level of customer confidence (compared to countries in which there is no government regulation of the sphere);
access to the European Union market;
the ability to manage the company and submit reports online.

In Estonia, cryptocurrency companies are essentially equated with traditional financial institutions, which significantly increases the level of security of transactions.

Main requirements for obtaining a cryptocurrency license in Estonia

The criteria for crypto companies wishing to acquire a cryptocurrency license in Estonia are established in the version of the AML Act, which entered into force on 03/15/2022. They require:

The presence of a physical office in the country.
At least one of the company’s directors must be a Estonia resident.
Existence of a corporate bank account or payment system within the territory of the EU economic zone.
The total contribution of the authorised capital must be at least 100.000 EUR or 250.000 EUR, depending on the type of services provided. Disclosure of the source of funding is required.
The activities of crypto companies must be carried out in accordance with all the international standards for combating money laundering and the financing of terrorism (AML).
The management and staff of the company must have an unblemished reputation, no criminal record or involvement in the fraud.
The Company Director must have at least two years of experience in law, auditing, finance, accounting, government or administrative management.
Any board member of directors can hold a similar position in up to 2 companies related to cryptocurrency activities.
An authorised person (AML officer) must have experience and knowledge in combating money laundering, have an official place of work in Estonia and not hold a similar position in other companies. His candidacy must be agreed upon with the regulator (FIU).
A crypto company must provide the regulator with detailed information about IT systems and other technological tools and solutions that are required to provide their services to customers and comply with security measures.
Crypto companies in Estonia are required to audit their accounts. An external auditor may be appointed.
A company wishing to obtain a cryptocurrency license must provide a detailed business plan for at least two years.

The process of obtaining a cryptocurrency license in Estonia: stages

Before applying for a crypto-license, you must carefully study the current legislation and the requirements of the regulatory authorities, delving into all the details. The applicant then has to go through the following steps:

set up a legal entity in Estonia (this procedure takes up to 5 working days);
open an account with a bank or payment system registered in the European Union;
deposit the total amount of the authorised capital to the account and receive a transfer confirmation from the bank;
register the authorised capital in the Estonian Commercial Register;
find an office and conclude a formal lease agreement;
involvement of a director who permanently resides in Estonia and meets the requirements of the regulator;
preparation of internal documents in accordance with the requirements and rules of the AML/KYC principles;
preparation of IT systems and infrastructure for the complete and uninterrupted operation of the company;
involvement of the legally required employees (auditor, AML specialists);
submission of a complete package of documents and a corresponding application for a cryptocurrency license to the FIU.

The application processing period is 60 days, but it can be extended up to 120 days. The verification of each company takes place in several stages.

It is important to remember that the cryptocurrency sphere is rapidly and constantly changing and developing, and new nuances and rules regularly appear in the work of crypto companies. If you want to get a cryptocurrency license without unnecessary difficulties, you should contact our specialists for help.

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