Changes in Estonian legislation from 15.03.2022 (new requirements for crypto companies)
The equity of the provider of virtual foreign exchange services
Virtual currency service providers are required to have the following authorized capital:
- A minimum of EUR 100,000 is required if the provider of virtual currency services provides a virtual currency exchange service (a service through which people can exchange virtual currencies for money and virtual currencies for money).
- Providing a virtual currency transfer service (a service whereby you can transfer a virtual currency to a virtual currency wallet or recipient account at least partially electronically on behalf of the initiator) requires a minimum of EUR 250,000 from the virtual currency service provider.
In order to establish a virtual provider of foreign exchange services, the authorized capital of the company must be paid in money.
Preconditions for customer identification and verification
In order to identify and verify identities, service providers should utilize technology that provides true identification and prevents the alteration or misuse of transmitted data.
A natural person who is referred to in paragraphs 1 and 2 of Article 31 of the Law on the Prevention of Money Laundering and Financing of Terrorism, or the legal representative of a legal entity, shall use the document Digital Identification, or another form of electronic identification approved by the Law on Identity Cards, to identify and verify their identity.; in accordance with Article 9 of Regulation (EC) No 910/2014 of the European Parliament and the Council on Trust Services Required for Electronic Identification and Electronic Transactions, repealing Directive 1999/93/EC (OJ L 257, 28.08.2014, pp. 73-114), is included in the list published in the Official Journal of the European Union), furthermore, an information technology tool with a working camera, microphone, and adequate hardware and software for digital identification and Internet connectivity.
The service provider can compare biometric data to identify and verify identity using an information technology tool.
Virtual Currency Service Providers of the exchange and transfer transactions are required to verify each customer’s identity and collect at least the following information regarding the person who committed the exchange and transfer transaction, in accordance with Articles 21 and 22 of this Law.
For a natural person, the name and gender of the person, the unique transaction identifier, the identification number of the payment account or virtual money purse, the identification number of the name and identity card, and the place of birth, date, and address where the person resides;
Virtual currency providers collect unique identification data about the recipient of virtual currency or transfers when facilitating transactions for exchange and transfer of virtual currency. If the payment account data or virtual currency wallet identifier is used for the transaction, the virtual currency provider will also collect the data of the payment account identifier and virtual currency purse identifier.
Plan of Action for Virtual Currency Providers
At least two years of business plans are presented by the virtual currency provider.
A virtual currency provider’s funds must be owned
Virtual Currency Providers must maintain funds that are equal to one of the following at all times:
- Amount of authorized capital
- According to the calculation method, own funds are calculated as follows:
As a minimum, the virtual currency provider’s own funds should be equal to the sum of the following parts of the volume if the provider provides the service specified in paragraphs 101 and 102 of part 3 of this Law:
- A total of 4% of the transactions in the provision of services that exceed or equal 5 million euros;
- More than 5 million euros in transactions in the service sector, but not more than 10 million euros;
- Over 10 million euros in operations carried out in the provision of services, but not exceeding 100 million euros;
- More than 100 million euros in transactions for the provision of the service but not exceeding 250 million euros; 0.5% of that amount;
- This represents 0.25% of more than 250 million euros of transactions conducted within the service.
For Part 6 of this Article, the share of transactions defined as services shall be calculated as 1/12th of the total volume of transactions defined as services in Parts 100 and 101 of this Article. If a venture capital company has operated for less than 12 months in the previous year, the amount of remittances and foreign exchange transactions made during the previous year must be divided by the number of months in the prior year.
It is vital for a virtual foreign exchange provider to take steps to ensure that its own funds are calculated accurately at all times.
In accordance with this law and the legal acts issued on its basis, the Financial Intelligence Unit may establish a timeframe within which virtual foreign exchange service providers must comply with the requirements established by the Law.
Audits of cryptocurrencies providers
Virtual foreign exchange service providers are required to audit their annual reports. Licensing applications should specify auditor data.
