ESTONIA Law and Practice Contributed by: Yuliya Barabash, Ivan Nevzorov, Daria Lysenko and Nikita Prokopenko, SBSB FinTech Lawyers
form financing (where a single loan can be financed by several investors participating in the financing through an online platform). For crowdfunding platforms, activities may be subject to European regulations that set requirements for plat - forms, disclosure of information to investors, and risk management. For financing by investment investors, the structure is more likely to be regulated by contrac - tual mechanisms and investor protection rules. 5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails Payment providers in Estonia most often use existing payment infrastructures (eg, SEPA) or payment net - works of card schemes (Visa) or correspondent bank - ing networks. The systems are already integrated into the European payment infrastructure and comply with EU requirements and standards. At the same time, there is no direct ban on the devel - opment of new payment solutions or infrastructures. The main thing is that they comply with financial regu - lation and security requirements. Fintech companies often create alternative payment interfaces but the actual transfer of funds usually goes through banks or payment systems. It is important for the regula - tor that the systems comply with the principles of customer protection, operational stability and AML requirements. 5.2 Regulation of Cross-Border Payments and Remittances Cross-border payments and money transfers in Esto - nia are regulated by EU law, in particular the Payment Services Directive (PSD2), anti-money laundering legislation, SEPA rules and implemented AML/CFT standards. To transfer funds, a business must obtain the appropriate licence from Finantsinspektsioon and then comply with the mandatory requirements. The key requirements remain AML/CFT, sanctions control, customer verification (KYC) and transaction monitor - ing. Businesses must collect and transmit information about payers and recipients, with particular attention paid to preventing transactions, transparency of ser -
vices and fees, and the operational stability of pay - ment systems.
6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms The possibility of creating marketplaces in Estonia directly depends on the type of assets and the nature of the transactions, and the regulatory regime is based on implemented EU legislation under the supervision of Finantsinspektsioon . • For financial instrument trading platforms, the European MiFID II regime applies, which requires platforms to obtain a licence to operate a multilat - eral trading system. • Crowdfunding platforms can operate in accord - ance with implemented EU legislation, which allows for the financing of projects through online platforms. • To operate a crypto-asset trading platform, the applicant must obtain the appropriate licence (CASP) in accordance with the implemented legis - lation regulating crypto activities. 6.2 Regulation of Different Asset Classes Under European law, different classes of digital assets in Estonia are subject to different regulatory regimes, which determine both the platform requirements and licensing requirements. For security tokens (subject to the applicable legisla - tion regulating financial instruments and in accord - ance with MiFID II and securities market legislation), the platform must obtain an investment licence to operate a multilateral trading facility (compliance with best execution, market abuse and investor protection rules is mandatory). Cryptocurrencies will be subject to MiCA rules. MiCA introduces a clear classification system for crypto- assets, categorising them into three main types: • asset-referenced tokens;
• e-money tokens; and • other crypto-assets.
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