Estonia: first Bitcoin license for the Striga bank

Estonia grants the Striga bank a license to be able to transact Bitcoin and cryptocurrencies.

Striga bank: the first authorized VASP in Estonia to have a Bitcoin license

For the first time, Estonia grants a license to trade Bitcoin and crypto to the Striga bank.

Bitcoin Magazine reports the news as follows:

JUST IN: 🇪🇪 Estonia grants its first #Bitcoin and crypto license to Striga bank 🙌

— Bitcoin Magazine (@BitcoinMagazine) September 22, 2022

The big news is that Striga represents the first VASP (Virtual Asset Service Provider) to be approved, after Estonia enacted a more stringent regulatory framework for those operating in the crypto world. 

In this regard, the country’s Minister of Finance is keen to point out:

“This means that the legislation does not contain any measures to ban customers from owning and trading virtual assets and does not in any way require customers to share their private keys to wallets.”

The announcement of the new reform was made by the country’s Financial Intelligence Unit. Measures to prevent activities, such as money laundering and terrorist financing, have been strengthened. The goal is to enable consumers and investors to operate in a healthier and more sustainable environment. 

The new guidelines introduced for VASPs

New provisions and minimum requirements were introduced for VASPs in order to obtain a license. 

First among them is the Know Your Customer (KYC) procedure, which is used for any financial service provider to identify the customer. This makes it possible to restrict access to all those users who are in the habit of engaging in activities that are not in compliance with the law and unethical. These include tax evasion, financing terrorist activities, and money laundering – although for the latter there are special provisions called AML (Anti Money Laundering).

If the VASP in question cannot adequately profile the user, then it will have to implement real-time risk analysis.

In addition, anyone who intends to offer products and services related to the crypto sphere must have a geographic connection to the local area in some way. Its activity, therefore, must be within Estonian borders. 

Regarding this point, the Minister of Finance of Estonia explained:

“Under new rules, the Financial Intelligence Unit can decline a license where the entity does not have any business operations in Estonia nor has any apparent connection to Estonia.”

Finally, the institution that intends to apply for the purpose of obtaining a license must meet certain minimum capital requirements. 

According to the Minister of Finance’s statement:

“VASPs will be required to have a minimum of 125,000 or 350,000 euros of share capital, depending on the type of service offered, increased from the current floor of 12,000 euros.”

This represents the most stringent requirement, which creates higher barriers to entry, especially for smaller companies. 

The bright side, though, is related precisely to those who will obtain the official license to operate as VASPs, who will surely have a more solid and stable financial structure. This will provide greater security and reliability for the customer.