Estonia Approves Bill to Regulate Crypto Service Providers

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Estonian government has passed a legislation that shifts crypto oversight to the Financial Supervision Authority (FSA) starting 2026. The bill aims to regulate local crypto service providers in a bid to regulate the nascent market.

Per reports from local media on Thursday, the law, if approved, will toughen up operational and reporting requirements. The bill is yet to receive parliamentary vote to become a law.

By bringing companies under the FSA’s purview, Estonia can control financial crimes such as crypto business bankruptcies and cyber thefts.

According to Matis Mäeker, head of Financial Intelligence Unit (RAB), what will change is that crypto businesses will come under “real financial supervision.”

Previously the Estonian regulator used to only deal with anti-money laundering (AML) requirements, ignoring the other major financial threats.

“They take in client assets – in the simplest sense they are like banks taking in people’s deposits and doing something with that money,” Mäeker added. “They have to hold that money, they have to then have systems in place so that as long as the person wants to get that money back, they have something to give back.”

Further, Minister of Finance Mart Võrklaev stressed crypto companies to obtain licenses from the FSA by 2026. “In 2025, licenses will be issued by the Financial Supervisory Authority,” he noted. Those businesses that already hold license to operate from the Financial Intelligence Unit are also required to get a new license from the FSA.

Additionally, fines for violating AML rules under financial law is at 40,000 euros ($43,450) currently. However, fines up to 5 million euros ($5.2 million) are possible under the new law, the report noted.

Estonia’s Position in the Global Crypto Arena

Estonia is among few countries that was first to legalize cryptocurrency activity and continues to keep a positive stance.

The bill, if approved, would bring Estonia in line with the European Union’s Markets in Crypto-Assets (MiCA) regulations. MiCA framework was signed into law last year, which is due to take effect this year.

With its forward-thinking legislation, favorable tax regime, streamlined licensing process and vibrant fintech ecosystem, Estonia has positioned itself as a go-to destination for crypto-related businesses that are seeking a competitive edge.

However, on the flip side, the Baltic nation fell victim to ‘massive-scale’ crypto-related fraud and scams, per an investigation report. The report noted that international crypto criminals have laundered or defrauded victims for more than €1 billion (1.05 billion).

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