Cryptocurrency License in Estonia

1. Contact details of the business owner (phone number, e-mail and mailing address), a CV.
2. Address of the provision of services and web page address.
3. Name and contact details of the person responsible for the offer.
4. Name, personal code (if not available – date of birth), place of birth and residence address of the real beneficiary of the company.
5. Procedural rules and internal control regulations developed according to Articles 29 and 30 of the Money Laundering and Terrorist Financing Prevention Act, and in case of persons with special responsibilities specified in Article 6 of the International Sanctions Act, procedural rules developed according to Section 6 of the International Sanctions Act, and the procedure for verifying their implementation.
6. Name, personal code (if not available – date of birth), place of birth, citizenship, residence address, position and contact details of the contact person specified in Part 3, Article 29 or Part 4, Article 29 of the Money Laundering and Terrorist Financing Prevention Act.
7. Name, personal code (if not available – date of birth), place of birth, citizenship, residence address, position and contact details of the person responsible for applying international financial sanctions, as determined by the business owner according to Part 9, Article 13.
8. If the business owner, the Board member, the procurator, the real beneficiary or the proprietor is a citizen of a foreign country or if the business owner is a foreign person offering services, it is necessary to submit a statement from the penalty register in one’s country of origin or an equivalent document issued by a judicial or administrative authority confirming the absence of penalties for crimes committed against government authorities, money laundering crimes or another deliberate crimes no earlier than three months ago and certified by a notary or in another similar way and legalised or approved by the certificate replacing legalisation (Apostille), unless otherwise provided by an international treaty.

In accordance with the Money Laundering and Terrorist Financing Prevention Act, amendments have been made to establish stricter boundaries for companies applying for an Estonian crypto-license.

1) Equity of a virtual currency service provider.

The authorized capital of the virtual currency service provider should be:

• at least EUR 100,000 if the virtual currency service provider provides a virtual currency exchange service (a service in which a person exchanges virtual currency for money or money for virtual currency or one virtual currency for another)
• at least 250,000 euros if the virtual currency service provider provides a virtual currency translation service (a service that allows you to make a transaction at least partially electronically through a virtual currency provider on behalf of the initiator in order to transfer the virtual currency to a virtual currency wallet or recipient account)

When establishing a company for a virtual currency service provider, the payment of the authorized capital of the company can only be money.

2) Prerequisites for the identification and verification of customer data.

The service provider must use high-security technology in identifying and verifying identity through information technology; which provides the true identity and prevents the alteration or misuse of the transmitted data.

In the identification and verification of identity by means of information technology, the natural person 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 the legal entity shall use a document digital

Identification or other electronic identification system with a high level of reliability issued under the Act on Identity Cards is included in the list published in the Official Journal of the European Union in accordance with Article 9 of the Regulation (EC) No 910/2014 of the European Parliament and the Council on Trusts Services Required for Electronic Identification and Electronic Transactions, repealing Directive 1999/93/EC (OJ L 257, 28.08.2014, pp. 73-114)and an information technology tool with a functioning camera, microphone and hardware and software, In identifying and verifying identity, the service provider may use an information technology tool to compare biometric data.

When performing an exchange and transfer transaction, the virtual currency service provider of the originator of the transaction shall establish the identity of each customer in accordance with the provisions of articles 21 and 22 of this Law and shall collect at least the following information concerning the originator of the transaction:

• In the case of a natural person, name, unique transaction identifier, payment account or virtual currency wallet identifier, name and number of identity document, as well as personal identification code or date of birth, place of birth and address of residence;
• When performing a transaction for exchange and transfer of virtual currency, the virtual currency service provider collects unique identification data of the transaction about the recipient of virtual currency or transfer, as well as data of the payment account identifier or virtual currency wallet, if payment account data or virtual currency wallet identifier is used for the transaction.

3)  The business plan of the virtual currency provider is submitted for at least two years.

4) Requirements for the virtual currency provider’s own funds.

The Virtual Currency Provider’s own funds should correspond to one of the following sizes at any given time, whichever is larger:

1.  Size of the authorised capital
2. The amount of own funds calculated according to the calculation method:

If the virtual currency service provider provides the service specified in paragraphs 101 or 102 of part 3 of this Law, the provider’s own funds of the virtual currency service provider shall be at least equal to the sum of the following parts of the volume:

1. 4 per cent of the part of transactions made in the provision of the service that is up to or equal to 5 million euros;
2. 2.5 per cent of the share of transactions made in the provision of the service, which is more than EUR 5 million but does not exceed EUR 10 million;
3. 1 per cent of the share of transactions executed in the provision of the service, which is more than EUR 10 million, but does not exceed 100 million euros;
4. 0.5 per cent of the share of transactions carried out in the provision of the service, which is more than 100 million euros, but does not exceed 250 million euros;
5. 0.25 per cent of the share of transactions made in the provision of the service, which is over 250 million euros.

The share of transactions performed as a service specified in Part 6 of this Article shall be calculated on the basis of one twelfth of the total amount of transactions performed as services specified in Parts 101 and 102 of Article 3 of this Law for the previous year. Venture service provider who worked less than 12 months in the previous year should split the amount of remittance and exchange transactions made in the previous year by the number of months in force in the previous year to arrive at the corresponding figure.

The virtual currency service provider is required to implement measures to ensure that its own funds can be calculated with sufficient accuracy at any time. The Financial Intelligence Unit may establish a period of time within which the virtual currency service provider must bring its own funds into compliance with the requirements established by this Law and the legal acts issued on its basis.

5) Audit of virtual currency provider.

Auditing of the virtual currency service provider’s annual reports is mandatory. The auditor’s data must be specified when applying for a license.

6) Requirements for location, location, board members and contact person of the virtual currency provider.

• The member of the board of the virtual currency service provider must have higher education and professional experience of at least two years.
• A member of the management board of a virtual currency service provider may not hold the position of a member of the management board of more than two virtual currency service providers.

7) State fee for application for cryptocurrency licence increased from EUR 3,300 to EUR 10,000.