Sunday, July 3

More than 1,000 euros could be the fine for downloading a bitcoin wallet without KYC

Key facts:
  • A company would have to pay up to 400,000 as a fine if it does not comply with the parameters of the new law.

  • The law is scheduled to take effect on February 1, 2022.

Up to 1,200 euros could be the fine that users would have to pay for downloading a self-custodial Bitcoin (BTC) wallet in Estonia, according to an amendment made to the law against money laundering and terrorist financing. It is based on several recommendations of the Financial Action Task Force (FATF) for trading cryptocurrencies.

On September 21, the Estonian Ministry of Finance introduced a bill before Parliament that refers to an amendment or modification of the law in force since 2017. In it, they touch on the issue of virtual assets and to regulate them they relied on the international group’s guide to regulating Bitcoin. Although the project is in the consultation phase, it is scheduled to come into effect on February 1, 2022.

According to the legislation, all crimes related to non-compliance with the law are punished and punished. In this case, a user can be fined 300 tax units. In that country, each tax unit is equivalent to 4 euros.

The story does not change for companies. Exchanges, digital wallets and other digital asset service providers (PSAVs) are also under threat. If they do not comply, they will have to carry fines of up to 400,000 euros.

The amendment is in the drafts to be discussed in the Estonian Parliament / Source: AR Minute.

Recent amendments

The Sumsub verification portal public this week several of the amendments that the Estonian Ministry of Justice introduced to the document, before its discussion in Parliament and its possible approval.

Under the law, the definition of digital asset service providers (PSAV) includes cryptocurrency exchanges and wallets, in addition to decentralized platforms, ICOs and other services that operate in the country.

These services have been regulated since last year, as well as financial institutions, so they must comply with the Money Laundering Law and verify users. All this under a license from the Financial Intelligence Unit of the European country.

Supported by the FATF

As mentioned above, the Estonian authorities decided to follow the FATF recommendations to launch restrictive measures, which are aimed at eliminating self-custodial wallets.

In this sense, in Estonia the FATF Travel Rule will now govern, an instrument with which peers are required to provide information when a transaction exceeds USD 1,000. This, in addition to stricter licenses and a greater scope of the law to “cover new cyber services.”

Modifications carried out by Estonian service providers must be submitted to the regulator before March 18, including an audit report that must be delivered before August 15. Operators who do not enlist will be in breach of the law, which can lead to license suspension.

The FATF this year updated its guide to regulate bitcoin, a fact, reported by CryptoNews. In it they recommend to exchange houses show your clients operations, just as it happens with the statements of account of the traditional banks.

Self-custody wallets could be banned in Estonia if the amendment is approved / Source: Business Insider.

Impact on Europe?

Estonia, although it has shown in the past to be a country and open to the Bitcoin ecosystem, now manifests a greater hardnessprobably due to the growth of this new economy in that country.

Already in 2015, several companies linked to BTC established a digital residence in Estonia due to the regulatory clarity offered by the government. Since then it has been opening up to the use of these assets, in coexistence with the traditional economy.

In CriptoNoticias we have registered several facts that demonstrate the approval that there was in Estonia regarding Bitcoin. Last March that country granted a license to a cryptocurrency startup that operates in Argentina, Brazil and Chile.

But the arrival of this amendment opened the way to many new expectations about what the increased use of bitcoin and other cryptocurrencies in the Baltic country could mean. The funny thing is that their actions can be followed by other European nations, who have been waiting for more examples to start dabbling in market regulation.

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