Over the past few years, companies that deal in cryptocurrencies have moved to a number of different places. This is because those places have laws that have helped the businesses grow. Check out the risk might be involved. You can check with a click here.
The Estonian Anti-Money Laundering Act (AML Act), which also governs virtual asset service providers, will change on March 15, 2022. VASPs who already have licenses and those who are applying for them for the first time will have to think about the stricter rules, such as the amount of capital that is needed.
Under the new rules, companies that want to offer services to move virtual money will have to have a share capital of at least 250,000 euros. This change will affect exchanges like Bitnomics, which is now regulated in Estonia and wants to make sure its customers can trade safely.
Since the cryptocurrency market has been going down recently, this kind of regulation is more than welcome. If prices drop quickly, not everyone might have enough money. This would put stress on the exchanges and make it more likely that regular consumers will lose money. Officials in Estonia are changing the requirements for capital to make sure this kind of problem doesn’t happen again.
If Bitnomics and the other exchanges in Estonia want to keep their headquarters open, they will have to do more to stop money laundering and make sure they know who their customers are. In these kinds of businesses, it’s important to follow the rules and deal with risks well. This structure should have rules about how to keep money from being laundered, how to deal with risks, and how to keep business going even if something goes wrong.
Once “Know Your Customer” is in place, the exchange will know a lot about each user and won’t let high-risk people open accounts. As part of the Know Your Customer (KYC) process, anyone who wants to trade cryptocurrencies on a trustworthy exchange must show proof of identity.
Keeping an eye on what’s going on
Every transaction must now be written down and kept track of, according to the new rules. This information must include the transaction ID and details about who started the transaction and who got the money. This is a more simple version of the FATF’s “Travel Rule” (Financial Action Task Force). The main reason these rules were made was to stop any shady financial deals from happening.
To find the right exchange platform, you have to look around, and it’s up to each user to decide which company is best. Because of the new rules, all exchanges must have a good business reputation and never have been convicted of a business-related crime.
All of these are good news for cryptocurrency users in general, but some experts think compliance will be harder for exchanges. Estonia is no longer seen as a place that supports cryptocurrencies, and early estimates show that some operators may stop doing business there. This might be because people in Estonia no longer care about crypto.
After 2020, Estonia’s Ministry of the Interior was no longer in charge of regulating cryptocurrencies. Instead, that job went to the Ministry of Finance. Here, one of the biggest changes took place. This probably was one of the biggest changes.
The Financial Intelligence Unit is in charge of most of the government’s crypto laws (FIU). The FIU carefully looked into each Estonian-licensed cryptocurrency company.
It found that there was a lot of illegal money moving around, but not through Estonia. Instead, fake companies and the blockchain were used to move the money. Even though these businesses were registered in Estonia, they didn’t even have a board member or an office there. The main focus of this framework is crypto assets, which is what MiCA stands for.