Estonia is a crypto-friendly country. However, there are certain challenges as well. Foreigners linked to Estonia’s e-residency program are being linked to cryptocurrency frauds.
It is worth noting that, the Financial Intelligence Unit of the local police discovered that companies from abroad owned by e-residents of Estonia took part in multiple large-scale exit scams.
Interestingly, regulators also suspect that Estonian firms and e-residents committed other crimes as well. They organized initial coin offering scams based on the information taken from the report prepared by the police.
Three months ago, Estonia suffered another reputational damage. The country was in the epicenter of a $220 billion money-laundering scandal. Notably, Estonian regulators immediately revoked the licenses of more than 500 crypto companies as a response to the scam.
At the moment, there are only 353 companies that have a crypto license in the country. The number of licensed companies fell from 1.234 to 353 companies in less than a year. This fact shows that regulators are willing to take measures to deal with crypto-related crimes.
This scandal already caused significant damage to the country’s digitization endeavors. However, the involvement of e-residents in crypto scams has the potential to create another problem.
The government of Estonia launched the e-residency program in 2014. This program offers Estonian citizenship to every person irrespective of where this person lives.
Currently, there are close to 70,000 Estonian e-residents. Hopefully, the e-residency team is working with the police and the Financial Intelligence Unit to investigate the case. Fortunately, the e-residency team is willing to improve the reputation of this program.
There are is no lack of crypto-related crimes. Despite challenges, there is no need to ban cryptocurrencies. Authorities in Estonia and elsewhere should work with companies and individuals to come up with the best solution.
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