The Estonian government has approved a bill to regulate cryptocurrency service providers, bringing the country into compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulations. The proposed legislation would subject these firms to the supervision of the Financial Supervision Authority (FSA) and introduce a licensing system to be implemented by 2025.
Currently, cryptocurrency service providers in Estonia are registered by the Financial Intelligence Unit (FIU) and are required to comply with Anti-Money Laundering (AML) regulations. Under the new law, holders of FIU licenses would need to apply for FSA licensing before the end of 2025. The legislation also aims to strengthen AML compliance by allowing for fines of up to 5 million euros ($5.2 million) for violations, significantly higher than the current cap of 40,000 euros.
Estonian Finance Minister Mart Võrklaev expressed confidence in the proposed regulations, stating that legitimate service providers should be able to obtain the new FSA license. The bill still needs to be approved by the government before going to the Riigikogu (Estonian parliament) for a vote. If passed, it would align Estonia’s regulatory framework with the broader MiCA regulations across the EU.
In addition to crypto regulations, the bill would also raise the threshold for securities prospectus requirements from 5 million euros to 8 million euros ($86.9 million), reducing the burden on companies seeking to raise capital through shares or bonds. Estonia has aimed to position itself as crypto-friendly since 2017 but tightened regulations in 2020 following a corruption scandal.
