Our fintech experts advised various virtual currency service providers in the licencing process under Estonia’s reformed AML Act. Our work included both obtaining new virtual currency service provider licenses as well as the renewal of existing VASP licences.
Renewal of existing licenses
We were engaged by Auto Coin Payments, the operator of the marketplace AutoCoinCars that facilitates cryptocurrency payments for the automotive industry and BB Trade Estonia, operator of the marketplace zondacrypto, a global cryptocurrency exchange platform, to advise them in the process of renewing their existing virtual currency service provider license under the legislative reform.
The renewal process was rather complex due to the uncertainties surrounding the implementation of the amended regulation and the constantly evolving guidelines issued by the authorities. The evaluation of applications for renewal of the licenses is still ongoing. According to the Estonian Financial Intelligence Unit, to date, only 18 license renewals have been approved nationwide.
Obtaining new licenses
We also advised Finitive Technologies, the Estonian operator of a leading infrastructure and liquidity provider Aquanow, which enables institutional and enterprise use-cases for digital assets and NjordX Finance, the operator of a crypto trading platform NjordX, in the process of obtaining a new virtual currency service provider license under the reformed AML Act in Estonia.
These matters are especially noteworthy, as according to the website of the Financial Intelligence Unit, only a total of 4 new licenses have been issued under the new regime.
Since March 2022, when the amendment of the Estonian AML Act entered into force, a considerable number of virtual currency service providers have stopped their operations in Estonia. Only 135 license renewal applications were submitted to the Estonian Financial Intelligence Unit by the statutory deadline in June 2022, while nearly 400 operating licenses have been either withdrawn voluntarily by the service providers or revoked by the Financial Intelligence Unit to date due to non-compliance with the tightened regulation.
More information about the amendments of the AML Act and their impact on virtual currency service providers can be found here.
Our services and client team
We advised Auto Coin Payments and BB Trade Estonia throughout the entire license renewal process, including redrafting the internal documents package, navigating the complexities of the renewal process and ensured their compliance with the novel regulatory requirements throughout the entire process.
We mainly advised Finitive Technologies and NjordX Finance in the process of communicating with the Financial Intelligence Unit.
The client teams in these cases were led by associate Krista Ševerev, counsels Jane Eespõld and Hetti Lump and partner Kätlin Krisak, supported by senior associate Robin Teever and associate Kadri Puu on corporate matters.