The Great Estonian Exodus — Crypto Firms Are Leaving Estonia

Back in 2017, the Estonian government rocked the legislative side of the crypto world when they introduced a raft of new laws designed to support crypto projects. These licenses split into two different categories: those looking to operate a crypto exchange and those looking to undertake an initial coin offering. Both company types stood to benefit from the first “real” cryptocurrency licenses anywhere on the planet.

As a result of these licenses, entrepreneurs digitally flocked to the small but great Baltic nation. The Estonian government was ahead in a number of ways. Not only was the country a trailblazer with crypto licenses but it also offered the ability for citizens of any nation to obtain a “digital residence.” This digital residency permitted entrepreneurs to locate themselves or their companies in Estonia in a legal sense, thereby obtaining the desired crypto licenses much easier, even if they conducted business elsewhere in the world.

Related: E for Estonia: How Digital Natives Are Creating the Blueprint for a Blockchain Nation

This ultra-modern combination of digital residency and the ability to operate a licensed cryptocurrency firm impressed almost everyone in the crypto industry — especially those looking for transparency and security. In total, around 2,000 companies, just a half a year ago, have obtained cryptocurrency licenses since Estonia began issuing them (this number is based on all crypto licenses issued).

Fast forward three years to January 2020, the Estonian government began deploying new rules relating to the companies that have been issued a license and those wishing to apply for cryptocurrency licenses — laws that change the landscape and appeal of the cryptocurrency licenses offered by Estonia.

These new measures have been strategically implemented as a result of the new European Union Know Your Customer laws passed down by legislators the year before. In a nutshell, these new laws require member states to regulate operations…

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