FIU Requirements for Crypto-licence in Estonia

What kind of activity needs a license?

requirements cryptoA virtual currency service is a service specified in paragraphs §3 10) and 101) of the Prevention of Money Laundering and Terrorist Financing Act (RahaPTS):

  • virtual currency purse service is a service that creates or stores encrypted keys for clients that can be used to store, store and transfer virtual currencies;
  • A virtual currency exchange service is a service where a person exchanges a virtual currency for money or money on a virtual currency or one virtual currency for another.

Virtual currency is a value represented in digital form that can be digitized, stored or sold and accepted as a means of payment by individuals or entities. Still, it is not a legal tender or financial instrument of any country in accordance with Directive (EC) 2015/2366 of the European Parliament and the Council on Payments Services in the Domestic Market. Amendment of Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) 1093/2010 and repeal of Directive 2007/64/EC (OJ L 337, 23.12.2015, pp. 35-127) within the meaning of Article 4 (25) or payment instrument or payment transaction within the meaning of Article 3 (k) and (l) that Directive.

FIU licence is required if the / token coin created by ICO conforms to the definition of virtual currency in §3 (9) AMLA and the company plans to buy or sell it.

Often created token is not accepted as a means of payment by other people, so it cannot be considered as a virtual currency in the sense of RahaPTS (although other functions correspond to a virtual currency), again, the company does not require a license to buy or sell the token. Since some types of ICO may include activities as an investment firm or loan brokerage services, a company may require a licence issued by the Financial Supervision Authority to provide such services. In the case of such services, please contact the Financial Inspectorate to apply for an operating licence or to assess the need for an active licence.

To provide a service of a virtual currency purse, a company that provides a service that includes storing another person’s virtual currency in such a way that the company has an overview and some control over transactions in the purse must apply for a license. In the case of virtual currencies, this is done through a service consisting of creating encrypted keys for clients that can be used to store, store and transmit virtual currencies.

Legal framework

The application for a licence to operate, the requirements and grounds for refusing an activity licence and for revoking an activity licence are regulated by articles 70-75 of the Money Act and articles 15-22, 24-25, 30, 32-33, 34, 36-40 Law on the General Part of the Code of Economic Activities (hereinafter MSÜS)

What information should be provided when applying for an activity licence?

In addition to the provisions of the MSÜS, the following information and documents must be submitted in the licence application:

  1. The address of the service, including the address of the site;
  2. Name and contact details of the person responsible for providing the service for all places of service referred to in paragraph 1;
  3. If the enterprise of a legal entity is not registered in the Estonian Trade Register, the name, register or the personal code of the owner of a legal entity, in its absence – date of birth, place of birth or address of residence, name, personal code, date of birth, place of birth and address of residence;
  4. The name, personal identification code, if absent, date of birth, place of birth and address of residence of a member of the administration and prosecutor of the service provider who is a legal person, If the service provider is not an enterprise registered in the Estonian Business Register; The Rules of Procedure and Internal Control prepared in accordance with §
  5. 14 and 15 of the Monetary PTS and, in the case of persons with special duties listed in §
  6. 20 of the International Sanctions Act, Rules of procedure prepared in accordance with the International Sanctions Act, 23 and its verification;
  7. Name, personal identification code, if absent, date of birth, place of birth, nationality, address of residence, position and contact information of the contact person appointed in accordance with § 17 PTC in respect of money;
  8. Name, personal identification code, if absent, date of birth, place of birth, nationality, address of residence, position and contact information of the person responsible for the international financial sanction imposed by the enterprise in accordance with subsection 20 (3) The International Sanctions Act;
  9. If the enterprise, a member of its administration, the prosecutor, the beneficial owner or the owner is a foreign national, a service provider established in a foreign State or, if the enterprise is a foreign service provider, Issuance of a criminal record certificate or equivalent by a competent judicial or administrative authority or in connection with another intentionally committed criminal offence; The issue of which has not occurred for more than three months and which has been notarized or legalized or certified by a certificate replacing legalization (apostille), unless an international agreement provides otherwise;
  10. If the enterprise, a member of its management body, a prosecutor, a beneficial owner or a self-employed person is a foreign national, a copy of the identity documents for all countries of citizenship and non-custodial documents referred to in paragraph 8; For a member of an administrative body and a prosecutor, documents containing the level of education, a complete list of posts and positions and, in the case of a member of an administrative body, duties, as well as documents which the applicant considers important to prove; NB! The certificate of education (diploma) must be submitted together with the application for the license.
  11. A list of payment accounts opened in the name of the company, with the unique identifier of each payment account and the name of the account holder; NB! All open payment accounts must be submitted together with an application for a licence to operate in the Register of Economic Activities, to which must be attached a certificate from a credit institution, an electronic money institution or a payment institution, the existence of a payment account.
  12. Information on which virtual currency service will be provided.

Requirements to the applicant

In order to obtain a licence to operate, an enterprise must comply with the following conditions of control:

  • A company, a member of its administration, a prosecutor, a beneficial owner and an owner shall not be liable to any applicable penalty for a crime against the State, money-laundering or other intentional criminal offence;
  • The company, a member of its management body, the prosecutor, the beneficial owner and the owner, have a good business reputation. The licensee of an activity must assess the existence of a proper business reputation in the light of the person’s prior activities and the circumstances surrounding it. It is presumed that there is a proper commercial reputation in the absence of opposing circumstances;
  • The contact person appointed by the enterprise in accordance with § 17 Money PTS meets the requirements established by law. Only a person with education, professional ability, necessary abilities, personal qualities and experience and an impeccable reputation may be appointed as a contact person;
  • If the company has a subsidiary that prefers to use the licence to operate requested on behalf of the company, the subsidiary must also comply with the above requirements;
  • The registered office, the board and the place of activity of an enterprise applying for a license for activities in the sphere of the provider of virtual currency must be located in Estonia, or a foreign company operates in Estonia through a branch, entered in the business register. The location of the board is assessed, for example, on the basis of the residence and citizenship of board members (the board member must be a resident or a citizen of Estonia) and other evidence of the board’s location. The place of business must comply with the requirements of article 29, paragraph 2, of the law on the General Part of the Civil Code (the place of business of a legal entity is the place of its permanent and permanent economic activity or other legally prescribed activity). If it is not possible to provide a virtual currency service on the site or to fulfill the requirements of RahaPTS, it cannot be a site. In practice, this means that those responsible for RahaPTS compliance work on the site have immediate access to the mandatory data received from RahaPTS, which the obligated person must collect, store and transmit to the supervisory authority, and have immediate access to them. Rules of procedure, risk assessment, internal control rules and other possible rules, additional documents to ensure compliance with the requirements arising from RahaPTS by the person under obligation and their employees. The place of business must also allow the FIU to exercise the supervision required by law, including on-site supervision. In the case of an application, a document confirming the right to use a place of business, such as a lease or lease, must be entered into the business register.
  • An enterprise applying for a license to operate in the field of a virtual currency provider must have an open payment account at a credit institution, an electronic money institution or a payment institution, established in Estonia or a Contracting State of the European Economic Area and providing cross-border services or a branch in Estonia. All open payment accounts must be submitted together with an application for a licence to operate in the Registry of Economic Activities, to which must be attached a certificate from a credit institution, an electronic money institution or a payment institution, the existence of a payment account. A list of payment accounts should also be added if the company already has a valid license for a virtual currency service, i.e. when changing a license;
  • The share capital of an enterprise applying for a licence to operate in this sphere of activity of a virtual currency supplier is not less than 12,000 euros, which is paid in full in cash and has to be confirmed by the data of the trade register.

What does the FIU control and can control during the licensing process?

  • Origin of the authorized capital of service providers of state duty and virtual currency.
  • Information on the convictions of the company and its associates, participation in various trials (criminal proceedings, misdemeanour proceedings, administrative proceedings, bankruptcy proceedings, etc. D.). Education and work experience, business connections. Of course, public sources and media are under control.
  • The Financial Intelligence Unit is also entitled to request information under §54 (11) and §58 (1) of the Money Laundering Act from other public authorities, as well as by order of third parties and pursuant to article 63 of the Money Laundering Act, also within the framework of the international exchange of information.

You can apply:

  • Entering the business register through a public portal (authentication is required for the use of the service);
  • through a notary.

Payment of government duty

To apply for an operating license, pay a government fee of €3,300 as a virtual currency service provider:

  • Swedbank – EE932200221023778606;
  • SEB – EE89101022003479 6011;
  • Luminor – EE701700017001577198;
  • LHV Bank – EE777700771003813400.

When paying, use the reference number 2900083015. In the explanation, state the name of the company and «Application for a license from the Financial Intelligence Unit».

Application processing

The sent application will be processed within 60 days after all necessary information has been provided, which can be extended to 120 days. The initial response from the Financial Intelligence Unit must be received no later than the third working day following the filing of the application. You will receive a license notice by e-mail. An activity licence is issued electronically and is valid indefinitely (if the activity licence has not been submitted on time). The FIU also indicates that if a company replaces persons involved in the circumstances of the subject matter (e.g., a board member, a contact person) during the activity/licence change procedure, The company must allow the FIU to verify the circumstances of the subject matter within 60 days. If the FIU is unable to verify these circumstances during this period, the FIU may refuse to issue an activity licence because the person does not fit the circumstances of the subject matter.

Modification of licence terms

If the circumstances have been verified as a precondition for obtaining an amendment to an operating license (see Candidate Requirements), you must notify the Financial Intelligence Unit at least 30 days before the planned change. The other shall be notified as soon as possible, but no later than within 5 working days, of any changes that have occurred independently and of any other information specified in the application for a licence to operate.

If you notify a change in a company, a member of its administration, prosecutor, beneficial owner or owner, the notice shall be accompanied by proof that there are no applicable fines if the person affected by the change is a foreign national. Other information referred to in article 70, paragraph 3, of the Monetary PTC must also be provided with respect to the member of the administration and the prosecutor.

Changes should be reported:

  • Entering the business register through a public portal (authentication is required for the use of the service);
  • through a notary.

Denial of operating license and revocation of operating license (§ 75 Money PTS, § 25 and § 37 MSÜS)

An activity licence will be refused or revoked if:

  • It appears that you knowingly provided false information when applying for a licence that affected the granting of the licence and which, if not granted, should have been refused;
  • you’re giving up economic activity (An enterprise that has not fulfilled the legal obligation to submit an annual report within six months of the expiry of this obligation is also deemed to have completely renounced economic activity). An enterprise that fails to provide the required annual confirmation that it has notified the FIU of any change in terms of the licence of activity is also deemed to have renounced economic activity.
  • Prohibition of the relevant economic activity applied to the enterprise in the relevant activity by a court decision or as a result of the law, with the exception of the prohibition of economic activity applied under the MSÜS;
  • The enterprise is licensed by the Financial Inspection Authority;
  • The enterprise repeatedly fails to comply with the prescriptions of the supervisory authority, and repeated non-compliance also constitutes non-compliance with the two prescriptions and is assessed in proportion to the scope of the enterprise, the basis and the significance of the issued prescriptions;
  • the enterprise did not start activities in the requested sphere of activity within six months from the date of issue of the permit (pursuant to §34 (5) MSÜS, the right that if the company temporarily ceases to conduct business. It shall not suspend the obligation to engage in such activities for a period of six months);
  • The enterprise did not conduct the economic activity for two years from the date of issue of the operating license;
  • Requirements for economic activity included in the object of control of an activity licence or additional conditions of an activity licence have been substantially violated The Money Act (i.e. the enterprise no longer complies with the circumstances of the subject matter of the license to operate under §72 of the Act);
  • Activities authorized by a licence to operate cause significant damage or a threat to public order which did not exist or were not known at the time the licence was issued; which outweigh the interest of the enterprise in continuing the activity and which cannot be eliminated by changes in the license of the activity.

The data provided by FIU in Estonia (Rahapesu Andmebüroo)

The specialists of Company in Estonia OÜ will be happy to assist with the crypto-licence in Estonia.

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