It isn’t just Malta that is attracting crypto business these days, other small and fast moving countries on the European continent are joining the action. The latest example comes from Estonia, which recently granted licenses for offering wallet and exchange services to the cryptocurrency trading platform Coin Metro.
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Robust AML/KYC
Coin Metro, which has been founded by the same team behind the Vanuatu-registered forex broker FX Pig, has announced that it has secured two licenses for cryptocurrency trading activities from the Estonian government. The licenses allow the company to offer fiat to cryptocurrency exchange services and cryptocurrency and fiat currency e-wallet services.
The “virtual currency” wallet license and the exchange license (links to Estonian Register of Economic Activities) are Coin Metro’s first pair of licenses, enabling the company to operate under Estonian law and attract customers from around the world. The licenses are said to provide a framework for establishing robust checks for Anti-Money Laundering, Counter-Terrorism Financing, and Know-Your-Customer (KYC).
These licenses represent the first step towards being able to operate its fully regulated trading platform, based in the EU, and comes soon after the conclusion of its €12 million token sale. The company’s next step is seeking an e-money license from the UK’s Financial Conduct Authority (FCA).
Kevin Murcko, CEO of Coin Metro commented: “We’ve set no geographical limits and are determined in our aim to bring transparent, simplified access to the cryptocurrency market everywhere, where laws allow. With regulation on our side, Coin Metro offers a safe haven from the forthcoming legislative storm that has the potential to close many exchanges which aren’t compliant.”
The Estonian Edge
The company explains its first choice for regulation by saying that Estonia is a popular location for crypto-related activity due to its open regulation and progressive attitude towards cryptocurrencies. An example of this was the country’s a plan to issue a state-backed national cryptocurrency – a plan just recently that had to be scaled down under intense pressure from the European Central Bank. It is now planned that these digital tokens will instead be distributed as an incentive to e-residents of the country.
Asked about the advantages of the jurisdiction, CEO Murcko told news.bitcoin.com that: “We decided to target Estonia (and build our HQ there) as it has been a hotbed for tech startups for years and has generally been very progressive on technology and innovation. In recent years, it has been actively adopting blockchain technologies, looking to be at the forefront of this new shift in distributed technologies. The fact that Estonia is the first country in the world to place its health records on the blockchain is a staunch example of just that.
The EU parliament passed the 5th Money Laundering Directive (MLD 5) in March of last year, giving the EU 18 months to draft a framework around the AML and KYC procedures for crypto exchanges and wallet services. Estonia was the first country to write and pass applicable legislation, and remains the only country to have done so for the time being.”
“While Malta is touted as a hub of cryptocurrency, and has a reputation of bringing new regulations to the island (gambling, FX, etc.), their crypto regulation seems to lack a solid foundation. Looking back at how previous industries have been regulated, it is not very promising,” he added.
Can Estonia become the next European cryptocurrency business hub? Share your thoughts in the comments section below.
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