Estonia’s crackdown on cryptocurrency companies has resulted in almost 400 virtual asset service providers (VASPs) either shutting down voluntarily or having their authorizations revoked following the government’s recently enhanced Terrorist Financing Prevention and Anti-Money Laundering (AML) laws.
The amended laws expanded the scope of VASPs, increased licensing fees, and capital and information reporting requirements, along with introducing the Financial Action Task Force Travel Rule.
Almost 200 domestic crypto service providers voluntarily shut down, with 100 active crypto firms now registered in Estonia as of May 1.
The country has made a considered effort to enact strong AML laws over the past few years, which was primarily due to the discovery in 2018 that around $235 billion worth of illicit capital had been laundered through the Estonian branch of Denmark megabank Danske Bank.
The recently enhanced AML laws may also have been influenced by Estonia’s partnership with the U.S. and its membership in the European Union.