The Estonian government has endorsed a bill that introduces fresh regulations for crypto service providers. The proposed law mandates oversight of crypto entities by Estonia's Financial Supervision Authority (FSA), reshaping the existing registration process under the Financial Intelligence Unit (FIU) and anti-money laundering (AML) regulations.

Finance Minister Mart Võrklaev emphasized that compliant firms seeking to continue operations must adhere to the enhanced requirements and can apply for licensing through the Financial Supervisory Authority. The FSA is set to start issuing licenses to crypto providers in 2025, necessitating existing FIU license holders to reapply under the revised guidelines.

Pending the approval of the Estonian parliament, the bill aligns Estonia with the EU's MiCA regulations, elevating regulatory standards within the country. The legislation also amends requirements for securities prospectuses, increasing the minimum threshold for capital-raising efforts through bonds or sales from 5 million euros to 8 million euros.

The updated law intensifies reporting and operational standards for crypto service providers in Estonia, targeting greater market security. Notable are the escalated fines, with potential penalties reaching up to 5 million euros for AML breaches, significantly surpassing the prior cap of 40,000 euros.

By bringing crypto firms under FSA scrutiny, Estonian authorities aim to enhance regulation and counter risks of crypto-related crimes. Responding to the development, Peeter Koppel, Chief Investment Officer at Redgate Wealth, anticipates improved credibility in the crypto industry, benefitting speculators in the sector.