Crypto Currency

The Crypto-Currency License in Estonia

If you’re an innovative, serious and future-building crypto-currency entrepreneur, the Estonian Crypto-Currency License might be the way to structure your business.

You can use two types of licenses:

1. Currency Exchange License.     

2. Crypto-Currency Wallet Service.

Licence Requirements

To apply for the above mentioned license(s), you must have a local company, or a branch office of a foreign company registered in Estonia. As per our experience, it’s better to use a local company (less paperwork).

Application for a cryptocurrency exchange license must be submitted to the Register of Economic Activities. The applying company is required to have at least one board member, one shareholder, and must appoint a compliance officer for performance of AML/CFT duties and obligations. This person must be a qualified specialist, and have solid knowledge of the Estonian language (as they often need to communicate with the authorities).

Application process

To proceed with the application you need to submit the following documents for each shareholder and director involved. All documents must be in English and certified with an apostille. These documents may not be older than 3 months:

• Passport copies
• Recent utility bills
• CV / Resume
• Bank reference letter

All related persons should have a non-criminal record (shareholders, board members, beneficial owners, and responsible persons). When a company is the shareholder, it also has to provide proof of a clean record. This means that using a corporate shareholder in your structure might result in delays in the licensing process.

When applying for option 1, a Cryptocurrency Exchange License, the following is also required:

• Internal control rules of the company.
• Internal procedure rules of the company.
• Company’s webpage address.
• name and contact details of the person in charge of provision of services.
• Information on the compliance officer designated for the prevention of money laundering and terrorist financing.
• Information on the person who is in charge of the imposition of the international financial sanction and who has been appointed by the undertaking in accordance with Estonian legislation.

The Application Process

The licence application shall be processed by the Financial Intelligence Unit (FIU). From the date of submission we expect to hear whether the license was granted within 2-6 weeks.

During the process, the FIU has the right to request additional information, and explanations about the planned activity. The license will be issued after all required information is considered sufficient, and all of the conditions are fulfilled.

In general, the whole application process is expected to take between 6 to 10 weeks.

It is worth noting that a license can be revoked if the company has not started operations within six months of receiving it.

Does This License Allow You To Do An ICO?

This license on its own cannot be considered a license for an ICO. The Estonian authorities state the following:

“The Estonian Financial Supervisory Authority (EFSA) is of opinion that tokens in terms of the offerings mentioned above, depending on their structure, might be considered as securities according to the definition set forth in the current Securities Market Act (SMA) as well as in the Law of Obligations Act (LOA).”

At the end of the day, the collection and control of third-party funds is regulated all throughout the EU. If your business model involves issuing tokens or coins, please let us know. We’ll check the activity beforehand. If it is considered an ICO, there are a lot of other regulations that come into play, from restrictions on what you can say in your white-paper and advertisements, to Anti-Money Laundering legislation.

Make sure to check the following page, when you're doing an ICO.

Our services

If you wish, we can assist you with obtaining this license. Our services include:

• Preparation and submission of all application forms and accompanying letters.
• Drafting the Memorandum and Articles of Association
• Providing directors/ shareholders questionnaires (to be prepared with your assistance),
• Provide AML/Compliance manuals and reports that you can use to submit.
• All other activites to ensure a smooth issuing of the license.

Are you interested in setting up a properly licensed crypto currency business?

Then contact us now via the contact from below: