Estonia Tightens Rules on Crypto Companies for Better Security

Estonia has introduced new laws to better control the cryptocurrency industry, a move announced by local media on March 21. These laws, passed on March 20, are Estonia's latest efforts to make the crypto market more secure and trustworthy.

The country, once a major hub for crypto companies with nearly half of the global crypto services based there in 2021, has seen the number of these companies fall to about 50 due to strict regulations by the Financial Intelligence Unit (RAB).

Matis Mäeker, head of RAB, highlighted that crypto companies will now be under financial regulation, similar to banks, ensuring they manage clients' assets safely.

Starting in 2026, the Financial Supervision Authority (FSA) will oversee these crypto services, marking a move towards tighter oversight. The law sets tougher rules for operation and reporting, with fines for breaches reaching up to €5 million, significantly higher than the previous €40,000 limit.

Additionally, crypto service providers must obtain a new regulatory license from the FSA starting in 2025, a step up from the current licenses issued by the FIU. This change aims to prevent incidents like cyber thefts and company failures that have led to investor losses.

By putting crypto companies under the FSA’s watch, Estonia seeks to minimize risks and ensure investor safety. This reflects Estonia's commitment to balancing innovation with market and investor protection, striving for a secure and stable crypto industry.