Given the rising popularity of NFT, it is safe to say that the once experimental trend is growing into a new type of art – crypto art. NFT means a non-fungible (non-substitutable) token (set of rules encoded in a smart contract) stored on a blockchain. Its function is to certify the uniqueness of a digital asset and prove its ownership. In other words, NFT represents a digital file that can be paintings, photos, videos, audio, and another type of files. Prices for some NFTs are shockingly high. The latest record was set at the end of 2021 when the digital artwork The Merge created by an anonymous digital artist with the nickname Pak was sold for almost $100 million on the marketplace Nifty Gateway.
Estonia has been a forerunner in regulating services related to cryptocurrencies. Until recently, the regulatory framework was very relaxed and the barrier for entry was set low. This is subject to change as amendments to the existing laws are introduced that provide further clarity and regulation to the cryptocurrency industry. In short, requirements for providing cryptocurrency-based exchange, trading, transfer, and wallet services shall be more akin to e-money institutions and other licensed financial service providers in Europe.
NJORD Law Firm’s Regulatory team has compiled a summary of the annual report from the FIU that gives an overview of the statistics regarding AML-reports submitted last year and feedback to the licenced companies.The Estonian Financial Intelligence Unit (hereinafter FIU) has again compiled an overview of the reports sent to the FIU, this time for the year 2020 by virtual currency service providers (crypto exchanges and e-wallet providers).
The Ministry of Finance published a draft regulation, which establishes requirements for virtual currency service providers. The draft is used to make the proposal that the supervision of all service providers, established in Estonia, connected with virtual currencies, be placed under the competency of the Financial Supervision Authority.