Beginning in February, Republic of estonia is set to introduce sweeping changes to its definition of Virtual Asset Service Providers, or VASPs, to include several cryptocurrency-related services — a move that could touch Bitcoin (BTC) buying in the land — according to European compliance specialist Sumsub.

On Sept. 21, the Estonian Ministry of Finance published a typhoon bill to update the Money Laundering and Terrorist Financing Prevention Human action (the AML Human action) as part of the authorities'southward effort to prevent money laundering and terrorist financing.

As Sumsub reported, the legislation is at present in the interagency review process, with implementation set up for February 2022. Regulated crypto companies have until March eighteen, 2022 to bring their operations and paperwork into compliance.

Co-ordinate to New DeFi CEO Mikko Ohtamaa, the updated police effectively bans non-custodial software wallets, as well as decentralized finance products, in the country. That's because the bill's provisions target VASPs, which include crypto exchanges and wallets, in Estonia. When the pecker is ready, VASP will exist extended to cover decentralized platforms, initial coin offerings and other services. Violation of the provisions may event in a punishment of up to $452,000, or 400,000 euros.

According to Ohtamaa's estimation, the new law has the following issue: "You are simply allowed to hold your Bitcoin in a custodial Virtual Asset Service Provider (VASP). VASP tin can freeze your account. So it is not finer your Bitcoin anymore."

Related: Estonia's crypto honeymoon at an cease equally stricter regulations loom

Estonia was ane of the starting time countries in the European Union to license cryptocurrency businesses, but information technology has had to crack down after hundreds of billions of dollars worth of dirty money was discovered in Danske Bank, positioning Estonia at the heart of Europe's biggest coin-laundering catastrophe.

As reported by Cointelegraph, Matis Mäeker, the head of the Estonian Financial Intelligence Unit of measurement (FIU), urged the government in October to "plow the rules to naught and outset licensing all over again." He stated that the full general public is unaware of the inherent risks of cryptocurrency, especially around its alleged function in money laundering and terrorist financing, too equally the vulnerability of the industry to cybercriminals.