TOP 5 changes for virtual currency service providers
In the fight against money laundering and terrorist financing the whole EU is renewing their AML requirements. Estonia will implement new rules for virtual currency service providers on the matter. TRINITI has put together a short overview of some of the most important changes. Firstly, the two different licenses are formally put under one name “virtual currency service” and when applying for authorization for operating, content and actual business activities will be marked in the submission i.e. wallet service and/or virtual currency exchange service. Secondly, license is now also required for exchanging one virtual currency for another virtual currency, when previously only exchange to fiat money was covered. Thirdly, virtual currency service provider shall have the same obligations under the MLTFP as financial institutions. Bringing out just few of these obligations:- rules of procedure for mitigating AML etc risks and internal control rules for compliance control must take into account the relevant instructions of the competent supervisory authority, European supervisory authorities and data protection supervisory authority (see MLTFP § 14 (4));
- it is obligatory to name (and coordinate with Financial Intelligence Unit) contact person – compliance officer (see MLTFP § 17 (2));
- identification of person and verification of data using information technology means are obligatory in cases described at MLTFP § 31;
- additional requirements when applying different due diligence measures (simplified, enhanced).
- present a certificate of the criminal records database or an equal document about undertaking, a member of its management body, procurator, beneficial owner and owner proving that they do not have any unexpired conviction for a criminal offence against the authority of the state, offence relating to money laundering or other willfully committed criminal offence;
- present documentations to prove that the before mentioned persons have a good business reputation (e.g. appropriate education, experience etc.);
- have the registered seat, the seat of the management board and place of business of the undertaking in Estonia;
- have a payment account in a credit institution, e-money institution or payment institution that has been established in Estonia or in a contracting state of the European Economic Area and provides cross-border services in Estonia or has established a branch in Estonia;
- have the share capital of minimum 12 000 euros (previously 2 500 euros) that has been contributed in full.
