According to reports, the new standards broaden the scope of Virtual Asset Service Providers to encompass DApps, Initial Coin Offerings, and associated services.
According to European compliance specialist Sumsub, Estonia is set to introduce sweeping changes to its definition of Virtual Asset Service Providers, or VASPs, beginning in February, to include several cryptocurrency-related services — a move that could impact Bitcoin investing and Bitcoin (BTC) ownership in the country.
As part of the government's attempt to combat money laundering and terrorist financing, the Estonian Ministry of Finance issued a draft bill on Sept. 21 to revise the Money Laundering and Terrorist Financing Prevention Act (the AML Act).
As Sumsub has said, the legislation is currently undergoing interagency assessment. The deadline for implementation is February 2022. Crypto enterprises that are regulated have until March 18, 2022, to get their operations and documentation in line.
The amended regulation basically outlaw’s non-custodial software wallets and decentralised financial solutions in the nation, according to New DeFi CEO Mikko Ohtamaa. This is because the bill's rules apply to VASPs in Estonia, which include crypto exchanges and wallets. VASP will be expanded to encompass decentralised platforms, initial coin offerings, and other services once the bill is completed. A penalty of up to $452,000, or 400,000 euros, might be imposed if the requirements are broken.
The new rule has the following consequence, according to Ohtamaa's interpretation: "You are only authorised to keep your Bitcoin in a custodial Virtual Asset Service Provider" (VASP). VASP has the ability to put a hold on your account. As a result, it's no longer your Bitcoin."
Estonia has outlawed not just #defi, but also #bitcoin which will effectively end crypto market investment opportunities through centralised providers, seriously nullifying options for Estonians that buy Bitcoin and altcoins.
In Estonia, downloading wallets and holding #bitcoin is no longer permitted.
Estonia was one of the first European Union nations to licence cryptocurrency firms, but it had to tighten its regulations when hundreds of billions of dollars in dirty money was uncovered in Danske Bank, putting Estonia at the centre of Europe's greatest money-laundering scandal.
According to Cointelegraph, the director of the Estonian Financial Intelligence Unit (FIU), Matis Mäeker, requested the government to "reset the regulations to zero and start licensing all over again" in October. He claims that the general public is uninformed of cryptocurrency's inherent vulnerabilities, including its purported role in money laundering and terrorist funding, as well as the industry's vulnerability to cybercriminals.