On 15 March 2022 the Financial Intelligence Unit of Estonia made new amendments to the Estonian AML act that regulates cryptocurrency businesses. The reason behind this is mostly the early adoption of crypto licenses and therefore weak supervision over the sector This has been considered to be the biggest risk for the Estonian financial sector.

This means that additional requirements apply to all crypto businesses that are based in Estonia. Basically all businesses that require a license will require it under the new crypto regulation. 

Overview of the New Regulations for Crypto Businesses

Here is an overview of the cryptocurrency regulations that were changed:

• Increased share capital requirements
  – at least 100 000 EUR for companies providing virtual currencies wallet, exchange and issue services
  – at least 250 000 EUR for companies providing transfer services
• Obligation to audit accounting reports and hire an internal auditor;
• Requirements for own funds similar to those of payment institutions, banks, and other licensed financial institutions;
• Expanded fit and proper procedure for management board members:
  – virtual currency service provider’s board member cannot have a position of a board member in more than 2 virtual currency service providers
  – virtual currency service provider’s contact person (appointed under current AML Act § 17) cannot be a contact person in other virtual currency service provider
  – actual place of business and registered office must be in Estonia
• Requirements to submit business plans and documentation on IT systems;
• An increased state fee of 10 000 EUR for making a licensing application (before 3300 EUR);
• Restriction for transfer of license – а license for provision of the virtual currency service is no more transferable;
• Introduction of supervision fees (currently suggested to be equal to ≈ 0.035% of every transaction plus 1% of share capital).

What Happens Next for Crypto Companies?

The new AML Act came into force on 15.03.2022. New requirements must be adopted and implemented by 15.06.2022.

Unfortunately this will not be possible for many existing crypto businesses. The situation is definitely difficult for many business owners. So, if you have realized that these new requirements are something you can’t unfortunately follow or it’s not cost-effective for you to follow them, we can help you:

#1 LIQUIDATION

Amongst all other business services, 1Office also offers full liquidation to the companies that have decided to end their business activities with their Estonian company. Our liquidation service is a full solution that includes everything from a local liquidator to drafting and submitting all the necessary legal documents. The process ends with deleting the company from the Business Register.

The price for the whole liquidation process is 850€. If you need any accounting done before the liquidation, we can offer that for an additional fee.

Read more about liquidation here.

#2 MERGING WITH PERSONAL ASSETS

If you are a sole shareholder of your Estonian company and would like to close your company, merging is an easier and faster way than liquidation.

In that case, it is possible to merge the company with your personal assets. This exit option is the fastest as it does not involve a company liquidation as the most time-consuming way to exit from the business in Estonia. Merging with personal assets takes approximately two months, depending on the notary and the complication level of the transaction.

The price for the merging process is 550€. If you need any accounting done before the liquidation, we can offer that for an additional fee.

In case you wish to merge the company with your personal assets, contact us directly at support@1office.co