VASP LICENSE

REQUIREMENTS FOR CRYPTO LICENSING

Cryptocurrency business requirements in Estonia in order to obtain a crypto license

As per the Anti-Money Laundering and Terrorism Financing Prevention Law, a unified cryptocurrency license called Virtual Asset Service Provider License is mandated for crypto-related operations. The Estonian government body in charge of issuing VASP licenses is the National Financial Intelligence Unit.

Companies applying for a license must provide the regulator with all necessary documentation and meet the following requirements:

• The share capital of the company is equal to 100,000€ or 250,000€, and the state fee for a crypto license is 10,000€;
• All important and necessary documents for cryptocurrency licenses must be submitted either to a notary’s office or through the Commercial Register website. The review process takes generally 120 days;
• The company board must be located in Estonia. Also, directors, shareholders, and beneficiaries (UBOs) of the company must have a flawless business reputation and a clean criminal record;
• The AML officer (compliance officer) must have a flawless business reputation and the necessary competence, knowledge, and experience in the AML/CFT field;
• Physical office is required to be present in Estonia. The company office must correspond to the nature of the services provided. Also, VASP is obliged to ensure access of the supervisory authorities to the stored data and documents at the company’s office;
• The VASP must provide the regulator with information about IT systems and other significant technological tools and solutions;
• Crypto companies are required to conduct audits of their annual report in order to ensure reliability and transparency;
• The VASP is obliged to conduct internal audits to ensure that the activities of the company, its managers, and employees are not going against the current legislation, regulator’s instructions, internal rules, ongoing contracts and agreements, as well as general business traditions;
• A crypto company has to have a business plan. It must contain among other things: a business strategy, planned activities, services, products, estimated income and expenses, and risk assessment.
  

The process of securing a Virtual Assets Service Provider license in Estonia unfolds as follows:

• Company formation in Estonia: This can be achieved either in person, through an e-residency card, or by granting power of attorney. Typically, this phase concludes within 5 working days.
• Opening a bank account: This account is essential for depositing your share capital and managing business transactions.
• Share capital registration and deposit: The capital needs to be deposited, followed by obtaining documented proof of payment. Then the next step is to get these contributions logged in the Estonian Commercial Register.
• Securing office space: You’ll need to provide a lease agreement for a workspace that aligns with the cryptocurrency venture’s objectives.
• Designating a local director: At least one local director is required. If relocation is not a particularly rational decision for the management of your company, you should involve a board member who is a resident of Estonia.
• AML/CFT documentation: Preparing internal documents and enforcing Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) measures.
• Infrastructure preparation: Preparing contracts with all necessary third-party service providers.
• Recruitment of experts: The firm has to sign agreements with internal and external auditors and necessary compliance personnel.
• License application: The final step of the process is submitting the license application to the Financial Intelligence Unit and staying updated on its progress.

Once registered, a VASP is granted Financial Institution (FI) status.