In 2019, before the "Virtual Currency Exchange Service License" and "Virtual Currency Wallet Service License" were unified into a single license, over 1,500 certificates authorizing the provision of services related to virtual assets were issued in Estonia. In 2019, over 80% of licenses issued globally were for entities based in Estonia. Considering the size and population of Estonia, it is one of the largest blockchain hubs in Europe. The country's attractiveness lies not only in cryptocurrency solutions themselves but also in business operations. The e-residency program, or verified virtual identity, is a driving force behind the success of the blockchain market. This solution allows anyone to start and actively conduct business completely remotely within the European Union. The fee for obtaining e-residency at the Estonian embassy is €120, with the verification process theoretically taking up to two months, but in practice, usually no longer than one month. Estonia's e-residency service is a place where you can manage services related to virtual offices, finances, taxes, legal fees, and banking. The digitalization of all official activities, combined with the ease of remote business operations and clear blockchain solutions, have made the country a target for many cryptocurrency ventures.

Estonia was the first European country to introduce clear regulations and guidelines for virtual currencies. However, cryptocurrencies are not recognized as a virtual means of payment and do not have the status of money. At the turn of 2017 and 2018, the Estonian Financial Supervision and Resolution Authority categorized crypto assets as those with a utility, charitable, payment, or property nature. Entities conducting an Initial Coin Offering must submit plans for the ICO to the aforementioned authority for verification, also before marketing the project.

Operating a cryptocurrency exchange or cryptocurrency wallet service requires obtaining a single license for both of these purposes. Similar to the requirements adopted in Switzerland and Malta, the company must have a physical headquarters in Estonia and complete a series of AML and KYC procedures. Estonia, on the other hand, is distinguished by its legislative requirements, specifically the required share capital of €12,000 and a one-time license application fee of €3,300.

The last three posts only mention some of the countries leading the blockchain world. We certainly recommend closely monitoring this dynamically developing market. Furthermore, when choosing a location, it's worth analyzing as many possible destinations as possible to select the most favorable legal location that meets the goals and scale of your project.

This alert is for informational purposes only and does not constitute legal advice.

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