The Estonian government has passed legislation that shifts oversight of cryptocurrencies to the Financial Supervisory Commission (FSA) starting in 2026. The aim of the law is to regulate local crypto service providers in order to regulate the nascent market.
According to local media reports on Thursday, the bill, if approved, would tighten operational and reporting requirements. The bill has yet to be voted on in parliament.
By subjecting companies to FSA oversight, Estonia can control financial crimes such as cryptocurrency company bankruptcies and cyber theft. According to Matis Mäeker, head of the Financial Intelligence Unit(RAB), what will change is that crypto companies will be under “real financial supervision.”
Previously, the Estonian regulator was only concerned with anti-money laundering(AML) requirements, ignoring other major financial risks.
“They are accepting customer assets – in the simplest sense they are like banks accepting people’s deposits and doing something with that money.” – Mäeker added. “They have to keep that money and then put systems in place so that as long as the person wants that money back, they have had something to give back.”
In addition, Finance Minister Mart Võrklaev stressed that crypto companies should obtain licenses from the FSA by 2026. “In 2025, licenses will be issued by the Financial Supervisory Commission,” he noted. Companies that already have a license to operate issued by the FIU must also obtain a new license from the FSA.
In addition, penalties for violations of anti-money laundering regulations under the Financial Law are currently 40,000 euros ($43,450). However, penalties of up to 5 million euros ($5.2 million) are possible under the new law, the report noted.
Estonia’s position in the global cryptocurrency arena
Estonia is one of the few countries to be the first to legalize cryptocurrency activity and continues to maintain a positive stance.
The law, if approved, would bring Estonia into compliance with the European Union ‘s regulation of crypto asset markets(MiCA). The MiCA framework was approved last year and is expected to go into effect this year.
With forward-looking regulations, a favorable tax regime, a streamlined licensing process and a vibrant fintech ecosystem, Estonia has become a favorite destination for cryptocurrency-related companies looking for a competitive edge.
But on the other hand, the Baltic nation has fallen victim to cryptocurrency fraud “on a massive scale,” according to the investigation report. The report notes that international crypto criminals have laundered or defrauded victims of more than €1 billion (1.05 billion).
