Estonia is facing major changes amid the implementation of a new crypto law, which is aimed at improving the country’s reputation of having a weak anti-money laundering system. In fact, since the law was put into effect, the number of registered crypto firms has dropped by around 80%.

This is due to the strict implementation of the new law, requiring companies to maintain hefty capital reserves and have a genuine connection to Estonia. As a member of the European Union, Estonia is soon to enforce the Markets in Crypto Assets regulations, which requires exchanges and wallet providers to get a license.

Not surprisingly, there have been multiple cases of fraud and suspicious activities, such as people showing up on companies’ management boards without their knowledge or credentials being falsified. On the other hand, because many companies are using the same cluster of legal and professional service firms, the documents are often repeated.

The Financial Intelligence Unit (FIU), which has been charged with the task of implementing the new law, is taking the matter seriously and is monitoring the situation closely. The FIU's Director Matis Mäeker is hoping that the law will professionalize the crypto projects in Estonia. Also, he is confident that the new law will help close the book on the banking sector scandals related to the laundering of Russian funds through their Tallinn branch.

With the help of the new laws and heightened surveillance of crypto firms, Estonia is making serious efforts to gain back the trust of the people and restore its image. It remains to be seen if they will succeed in the long-term.



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