Estonia has been a country at the forefront of fintech innovation.
The nation has been a pioneer in the crypto and blockchain industry, adopting regulations and policies favourable to the fostering of crypto business. Estonia’s e-residency programme has additionally been a great aid in the digitalization of the economy’s infrastructure.
Can I Buy/Sell/Own Crypto in Estonia?
It is legal for residents in Estonia to own, buy and sell cryptocurrencies and blockchain-based assets. This can be done through exchanges, Bitcoin ATMs and peer-to-peer.
How Do I Get My Crypto Licence in Estonia?
In 2017, Estonia launched specifically tailored licences for crypto exchanges in the country. Previously, two different sets of licences were given, the Virtual Currency Exchange Service License and the Virtual Currency Wallet Service License. Last year however these licences were merged to simplify the process into the Estonian Cryptocurrency Exchange License.
To apply for an Estonian Cryptocurrency Exchange License; a minimum of 12,000 EUR share capital be obtained (which cannot be denominated in crypto assets), an Estonian company incorporated, certificates of non-criminal backgrounds of shareholders / board members presented, information of the individual responsible for compliance present and a number of other stipulations must be met.
Estonia Crypto AML Regulations
Estonia’s compliance regulations in respect to AML is strict.
As a European Union member state, the Republic of Estonia follow the EU’s set of regulations surrounding AML (Anti-Money Laundering) and CFT (Countering the Financing of Terrorism). Estonia’s AML/CFT laws have been updated in line with the EU’s 5AMLD.
Read: 5 Steps Into the 5th Anti-Money Laundering Directive (5AMLD)
Crypto businesses operating in Estonia must follow the Money Laundering and Terrorist Financing Prevention Act. The Act was amended in 2020 to stipulate that Virtual Asset Service Providers (VASPs) must follow the same rules as financial institutions.
This entails the appointment of a Compliance Officer that is given oversight of a business’ compliance functions in line with a Risk-Based Approach. Firms must take a Risk-Based Approach by applying Enhanced Due Diligence to high-risk customers and relationships, and conduct Know-Your-Customer (KYC) checks. Suspicious Activity Reports (SARs) must be submitted to the Estonian Financial Intelligence Unit.
Customer information such as KYC documents, transaction history and SAR filings must be retained for up to 5 years after a relationship has been terminated or the last transaction was conducted.

The Estonian Government Anti-Money Laundering Commission stated that it would focus on cryptocurrency oversight in 2021, with a particular focus on building out KYC obligations, record maintenance and payments.
How is Crypto Taxed in Estonia?
Crypto assets are classed as property under subsection 15 (1) of the Income Tax Act in the Republic of Estonia. Income tax is charged on the earnings from investments into crypto-assets as is treated the same as receiving income in cash. Only income-generating transactions (exchanges or transfers) need to be declared.

Estonia Crypto Regulations for Mining
In Estonia, the activity of mining cryptocurrency is a legal activity. As seen in the above section on taxes, income from crypto can be taxed as regular income. If not paying income tax, another option is to declare the revenue generated as business income.
Note, if an individual is continuously mining crypto, they must register as a sole proprietor in the Business Resgiter.
Estonia Crypto Regulators
- The Ministry of Finance in Estonia is responsible for proposing regulations applicable to crypto-assets.
- The Estonian Financial Supervision and Resolution Authority is responsible for monitoring the following of regulations by businesses operating in the European Union country.
- The Estonian Financial Intelligence Unit is the country’s independent agency responsible for combatting financial crime.
- The Estonian Tax and Customs Board is responsible for collection of taxes in the nation.

Notable Crypto Regulatory Actions in Estonia
Late last year, Estonia revoked more than 1,000 licences after the licensees were found to be non-compliant with the new regulations brought in under the amendments to the Money Laundering and Terrorist Financing Prevention Act.
Part of the clampdown was additionally believed to be related to 1) revelations of a large-scale money laundering operation in the country across the wider financial system and 2) the abuse of the e-residency programme where Estonian police uncovered a number of foreign nationals operating crypto businesses benefitting from scams and 3) the difficulty with regulating all licencees due to the COVID-19 pandemic.