Estonia, one of the European Union’s most favorable countries for crypto-currency, is cracking down on hundreds of licensed crypto-currency companies in response to a US$220 billion money-laundering scandal, according to Bloomberg.
Estonia was one of the first countries in the European Union to license crypto-currency companies, but has been forced to take drastic action after hundreds of billions of dollars of dirty money were detected in the Estonian unit of Denmark’s largest lender, Danske Bank A/S. It has put the country at the centre of Europe’s biggest money laundering scandal.
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License to damage
Madis Reimand, Head of the Baltic country’s Financial Intelligence Unit, revealed that regulators suspect that licensed crypto-currency companies are abusing their Estonian credentials to commit fraud elsewhere.
As a result, more than 500 companies, approximately one third of the total, have had their permits withdrawn if they have not started their operations in Estonia within six months of obtaining the permit. He explained that
„This is a first step to put the market in order, which allows us to deal with the most urgent issues by allowing operations only to companies that can be subject to supervision and enforcement measures in Estonia.“
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The purge is not over
Reimand indicated that stricter licensing measures will come. More than half of the country’s remaining crypto-currency companies could also lose their licenses, as they also do not have operations in Estonia and their managers are outside the country.