If the activities of your financial company are related to cryptocurrency and you have access to the cryptocurrency assets of clients, then such an Estonian company must have an appropriate license. The consequences of doing business without a proper license can be serious, resulting in a company being fined by the regulator and its reputation in the digital age could be hopelessly damaged.
It should also be noted that crypto-companies are a high-risk area of activity, therefore proper control of crypto-companies for compliance with relevant legislation requires special attention from the Regulator (Rahapesu andmebüroo). The lawyers of Company in Estonia OÜ monitor our clients’ compliance with the requirements of the Regulator, preventing fines or license revocation at an early stage.
Reasons for License Revocation by the Regulator
The most common problem today is the revocation of licenses from crypto-companies that have changed their owners in the course of their existence. Also a common problem is the Director’s inadequacy and the inability of the KYC/AML Officer to fulfil their duties. Many Estonian companies have lost their licenses due to a lack of contributed share capital or problems with an office that did not meet the requirements of the Regulator.
The next frequently encountered problem is a nominal KYC/AML Officer who has no idea about the law on the basis of which the license was obtained and about the real activities of the company in which one is employed.
Fraudulent Schemes of Service Providers
Law firms often offer KYC/AML Officer/Nominee Director services to many companies at once, thus jeopardising the licenses and reputation of all their clients. Based on the information we have, over 500 crypto-companies have lost their licenses due to such fraudulent schemes.
It often happens that unscrupulous law firms offer their clients companies with already obtained crypto-licenses, and in search of ready-made and quickly implemented solutions, entrepreneurs agree to such transactions. In such cases, the risks of losing a license, which may arise in the process of a change of ownership, are deliberately concealed by unscrupulous service providers. Judge for yourself: obtaining a crypto-license by an Estonian citizen lawyer is a much easier and faster process than obtaining a license by a company owned by non-residents of Estonia. After the re-registration of such a company for new owners, the licensing process, in fact, begins from the very beginning, since the previous license is suspended by the Regulator for the period of the change of management and analysis of information about the new owners and the project.
Before starting the licensing process, you should understand that quick and cheap solutions are excluded, and by agreeing to them, you take full responsibility for the loss of time and money.
How to check if a company has a license or registration to do business in Estonia?
Before you start working with a service provider, you should check if the law firm is licensed. Fortunately, the general public has the right to do this on its own online at https://mtr.mkm.ee/tegevusluba?m=97.
Crypto-companies and industry partners use this resource to ensure that they/partner companies being considered for cooperation are licensed in Estonia. The information on the website is publicly available. In addition, on the homepage of the Ministry of Economic Affairs and Communications you can check: the address of the location of the cryptocurrency company; an account with a financial institution registered in Estonia; KYC/AML Officer’s data (name, surname, email, phone), and the date of issue of the cryptocurrency license. If you have any questions or suspicions, we recommend that you contact the Regulator directly to resolve them (Rahapesu andmebüroo, [email protected]).
Rahapesu andmebüroo is an Anti-Money Laundering Information Bureau that licenses businesses in Estonia. RAB is an independent structural unit of the Police and Border Guard Board, whose main task is to suppress the financing of money laundering and terrorism in Estonia.
The Bureau analyses and verifies information received from liable organisations and other persons regarding suspicions of money laundering or terrorism, if necessary, takes measures to preserve property, and if signs of a crime are detected, immediately transfers the material to the competent institutions. The main tasks of the RAB are described in more detail in the Money Laundering and Terrorist Financing Prevention Act.
It is expected that all persons who suspect that the transaction may be related to the financing of money laundering or terrorism in the course of an economic transaction will report suspicious transactions to RAB. Since January 2008, it has become possible to report violations over the Internet by filling out an electronic reporting form on the Rahapesu andmebüroo homepage.
In addition to the main tasks, the Information Bureau on money laundering performs various additional tasks to improve the efficiency of the system for suppressing the financing of money laundering and terrorism in Estonia: for example, various studies were carried out both among market participants and among law enforcement bodies.
Today, one of the most important tasks of RAB is the licensing of participants in the Estonian financial market, in particular, persons providing services to financial institutions, persons offering e-currency exchange services, and persons offering virtual wallet services.
Taking into account the needs of customers from all over the world, Company in Estonia OÜ has developed an all-in-one offer “Company & Crypto-License in Estonia”, which includes registration of an Estonian company plus all the necessary services for obtaining a single crypto-license.
Company in Estonia OÜ offers a wide range of additional services, such as assistance in selection and rental of an office; assistance in making company share capital contribution; assistance in recruiting a local Company Director, signing a working contract; training of a Company Director for KYC/AML requirements; as well as KYC/AML Officer services.
An individual customer approach is vital for us. We take care of your business needs, combining personalised order processing and professional consulting, reasonable rates, and company registration services for clients from all over the world. In addition, Company in Estonia OÜ provides continuous support to entrepreneurs in accordance with the latest updates in Estonian legislation.