The anti-money laundering bureau of Estonia has revealed an astonishing 80% drop in the number of registered companies that operate within the cryptocurrency space. This sharp decrease in the number of firms is a result of the alteration of the Prevention of Money Laundering and Terrorist Financing Act, enacted on March 15th, 2022. This act implemented a series of new regulations to be adhered to by those seeking to take part in the cryptocurrency market. As a result, many companies fell short and failed to comply with the new regulations, resulting in a shift in numbers from 650 to 100.

Matis Mäeker, the head of the Anti-Money Laundering Office, noted that some firms’ applications contained questionable instances, such as unnamed individuals proposed to become board members, or numerous logical and spelling errors. Subsequently, the bureau acknowledged that 200 of the businesses had relinquished their license whilst the remaining losses were due to invalidation due to non-compliance. Mr Mäeker has since stated his plans for further enforcement, outlining the need for a shift from “largely paper based assessments” to “daily on-site supervision”.

The tightening of regulations has come due to the realizations of the dangers posed by money laundering and terrorist financing opportunities through the cryptocurrency market. These dangers were highlighted when two Estonian citizens were charged with organizing a $575 million crypto fraud and money laundering scheme at the end of last year.

The rigorous Prevent Money Laundering and Terrorist Financing Act enforced in Estonia has resulted in a decrease of 80% in licensed crypto firms, with only 100 firms now legally operating within the cryptocurrency market. This indicates the seriousness in which the government has taken its approach towards the prevention of money laundering and terrorist financing, whilst having caught the attention of other European members due to its effective implementation.



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