Estonia Cryptocurrency License Requirements in 2025: What Has Changed? 

• Due to its optimal regulatory environment, Estonia Cryptocurrency License Requirements make the country the very business-friendly jurisdiction in the crypto industry. Estonia was the first EU country to regulate activities using cryptocurrencies and integrated separate licenses for exchanges and wallets into one Virtual Currency Service Provider License to ease the application process.  

• Following this development, Estonia has emerged as one of the largest centers for crypto businesses within Europe, with more than 2,000 issued cryptocurrency licenses. Just last year, alone, the Estonian FIU approved over 900 licenses. The interest in Estonia’s crypto sector continues to grow, and the transparency of regulation leaves fewer grey areas about its stance on cryptocurrencies, thus building trust between investors.  

• Competition from other crypto-friendly destinations such as Malta and Switzerland, Estonia, on the other hand offers cheaper operational costs, thus is even more appealing for a startup looking to register company in Estonia and be able to get an Estonia Cryptocurrency License. Since Estonia is a leader in digital innovation, their e-residency program eases business establishment and management even further for foreign entrepreneurs. 

Estonia cryptocurrency license requirements 

The requirements to meet in order to qualify for a cryptocurrency license in Estonia are minimal: 

• Required share capital depending on the service provided. As if a VASP offers a virtual currency transfer service that allows you to make a transaction at least partially electronically through the provider of virtual currency services on behalf of the initiator for the transfer of virtual currency to the virtual currency wallet or account of the recipient, at least €250,000 of share capital is required. 

• Economic substance required in Estonia – physical office, local management team and compliance officer. 

• Appointment of a local AML/CFT officer. 

• At least one director must be an Estonian citizen. Tetra Consultants can provide nominee director and shareholder services. 

• Non-criminal records for all members in the company regardless of citizenship. 

• Non-criminal background confirmation of all company officers. 

• Corporate bank account opening with a bank or Electronic Money Institution (EMI) in an EEA country. 

Changes in 2024 for Estonia cryptocurrency license requirements 

Scope of virtual currency service: 

• Prior to the new amendment, the term virtual currency services applied only to virtual currency exchange and wallet services. 

• By the amendment, the meaning of “virtual currency service” has been broadened to encompass services related to the issuance of virtual money, including the organization of its public or directed offer, sale, or provision of associated financial services. 

• All intermediaries between buyers and sellers, as well as services that bring buyers and sellers together (brokerage services, order-book exchange services, etc.); 

• P2P and Defi are the decentralized platforms. If there is no corporates body, then an individual who has setup or established the platform and holds some rights or authority on the same will be regarded as VASP. Outsourcing transactions to other parties: All business counterparts would be regarded as VASPs in this category 

• ICO platforms and other similar services, including ISO and TGE, are provided by the issuer or any third party that helps market, sell, or distribute virtual assets. 

Share capital and license fees 

• Earlier, the mandatory minimum share capital to submit the application for an Estonia cryptocurrency license was €12,000. A VASP license costed €3,300. 

• Following the recent amendment in the licensing regulation and norms, the licensing fees have risen along with some extra provider expenses. Therefore, as a result, the following has been altered regarding the licensing fee: 

A new VASP license will be accompanied by an administrative fee of €10,000;  

• The changes have also highlighted further requirements in share capital to be applied for an Estonia cryptocurrency license. Requirements are as listed below: 

• A VASP, such that it offers the exchange of one’s virtual currency against money or vice versa, money against virtual currency or one virtual currency against another. It requires at least €100,000 of share capital. 

• A minimum of € 250,000 share capital is required if a VASP offers a service related to virtual currency transfer and will enable you to make at least a part of a transfer electronically via the provider of services for virtual currencies on behalf of the initiator in the transfer of the virtual currency to the recipient’s virtual currency wallet or account. 

Management  

• Previously, the Finance Intelligence Unit demanded proof of education, professional experience, previous positions, and so on, from the board of directors. 

• After that, the new law determines rules for the management board and contact persons. There are two main demands: 

• Members of the board shall hold higher education and not less than two years of professional work experience, and a management board member shall not serve on more than two boards of VASPs. 

Estonia cryptocurrency license application requirements 

The amendment requires that the applicant also submit and comply with the following further requirements while applying for a cryptocurrency license in Estonia:  

• Financial information, including the composition of assets and share capital, as well as an income and cash flow summary;  

• A two-year business plan specifying the type of business operations the applicant will conduct, the organizational and managerial structure, etc. 

• Documents of risk appetite and details of risk assessment;  

• Information about technological systems to be used in provision of the services intended including a description of security controls, business continuity measures, and the technical management level;  

• A description of information technology systems to be used in tracking and identifying transactions, customers, and their beneficial owners, as well as transfer of information to be used in the fulfillment of the Travel rule obligation. 

• The applicant’s firm of financial audit that validates the applicant’s finances. Businesses should also appoint and provide information on an internal auditor who will scrutinize the AML systems and procedures, practice guidelines, and management decisions;  

• The number of shares and votes bought or owned by each shareholder. 

Travel rule 

• Under the new amendment, virtual currency service providers have additional due diligence and know-your-customer (KYC) processes that must meet the ‘travel rule’ standards set by the Financial Action Task Force (FATF). This means operators will obtain identifying information about the originator of a virtual currency transaction and then forward that information to the recipient’s service provider. These must include names, unique IDs, dates of birth, residence addresses, and register numbers. 

• In addition, virtual currency service providers will be expected to obtain proof of funds and documentation proving the origin of their funds, which is extremely hard to achieve in the DeFi world because of the decentralized nature of the transactions involved. Even if a particular wallet is involved in an unethical transaction, tracing the money trail back to the perpetrator is difficult since they can simply route their cash through multiple protocols across centralized exchanges. 

Refusal and revocation of license 

• The new amendments strengthen the authority of Estonian officials to refuse to grant an Estonia cryptocurrency license or cancel existing VASP licenses of virtual currency service operators. It was so that applications could be refused only on the ground of the failure of the operator to demonstrate AML procedures, payment accounts in Estonia, and other working procedures established necessary by a regulatory authority, but since the reforms in the rules, it can be declined if such an operator proves not to intend conducting reasonable operations within Estonia or such an applicant had the former licenses canceled or was given revoked due to an invalid or insignificant set of the rules that regulate their behavior. In addition, the FIU is entitled to refuse an application for a license if such an application contradicts the legal form of share capital of the applicant. There are further requirements in order to have an active VASP license. 

• According to the amendment, a business operator must have real and actual economic activity in Estonia during six months consecutively and give truthful information only about his business activities. The FIU shall have grounds for withdrawal of a VASP license if a license holder is involved in money laundering or terrorist financing activities or has selected Estonia merely for the purpose of evading stricter AML standards in countries where it is already actively operating. 

Conclusion 

• Estonia cryptocurrency license requirements will be crucial to any business that wishes to thrive in the crypto space. To navigate this complex process, look no further than Tetra Consultants. As part of our licensing services, we can provide business services that include offshore financial licenses, offshore company incorporation, corporate bank account opening, and many others, thereby ensuring that your venture has a firm footing in the dynamic environment of Estonia’s regulations. 

• Contact us to know more about Estonia cryptocurrency license requirements. Our team will revert back in 24 hours.