There were two types of licenses for crypto business in Estonia:

1. Providers of a service of exchanging a virtual currency against a fiat currency

This type of license allows you to exchange fiat to crypto and crypto to fiat. 

2. Providers of a virtual currency wallet service

The second type of license allows you to provide e-wallet services for virtual currencies. You can generate and keep encrypted keys on the behalf of the client, providing custodial services of the required credentials to access the virtual currencies.

Both types of licenses are issued by the Estonian Financial Intelligence Unit (FIU).

But on December 19ᵗʰ 2019 the Estonian President confirmed amendments to the Estonian AML law, which affects all companies holding crypto licenses (e.g. exchange and/or wallet license) in Estonia and all new license applications. 

The new law will come into force March 10ᵗʰ 2020 from which point all new license applications have to comply with new regulations. For all current companies holding the crypto license(s) the deadline to comply with new regulations is latest 1st July 2020. Otherwise the licenses will be revoked. The name and structure of licenses are also changing; there will be one umbrella license “virtual currency service provider” which will cover various activities in the field.

There are planned some changes by FIU for the holders of the existing licenses and new applicants:

1. State fee will be increased to 3300 EUR from current 345 EUR

2. Substance requirements, the headquarter and management should be located in Estonia

3. Application period will be increased to 3 months from current 1 month

4. License application review time by FIU increased from 30 days to 60 days (with right to prolong up to 120 days)

5. The size of the required share capital increases from 2500 EUR to a minimum of 12 000 EUR

6. Non-criminal records extract for all participants in the company from all countries of citizenship, including CVs and education background

7. For applicant or licenses holder - opened bank account / fintech (PsP) account in an EEA country

Please feel free to contact us for more details!

Steps to do in order to apply for a license

1. Set up a local company

2. Collecting KYC documents for shareholders, directors, compliance officer, UBO

3. Obtaining the criminal record documents for all above mentioned persons

4. Preparation of KYC/AML procedures and internal auditing rules documentation

5. Sending the application to FIU and paying state fee.