Global economy is a mixture of crude state intervention and sophisticated market manipulation. Evading both, no matter the purpose, is the ultimate crime now.
According to the independend journalist group Vsquare, the Baltic states, especially Estonia, which is known for the extensive digitization of both its public and private sector activities, have become nexuses of illegal financial activities based on cryptocurrencies.
These are the main findings of the report, each of which deserves its own analysis:
- In the past five years, Estonia has emerged as a prominent global hub for cryptocurrency companies. By mid-2021, approximately 55% of all virtual currency service providers worldwide had registered their operations in Estonia, a staggering figure.
- Estonia’s permissive crypto licensing framework allowed these virtual currency companies to market themselves as EU-certified financial service providers.
- VSquare and its collaborators conducted a thorough examination of nearly 300 crypto firms. Main findings included significant fraud, money laundering, sanctions violations, and the illicit funding of criminal enterprises and paramilitary groups.
- In many cases, the designated anti-money laundering (AML) officers and company managers were hilariously ill-equipped and financially unstable. Taxi drivers, welders, and individuals reliant on social assistance were handling, at least nominally, numerous crypto enterprises worth millions of dollars.
- As Estonia began implementing stricter regulations and revoking licenses, numerous companies relocated to other European countries, such as neighboring Lithuania. This highlights the fact that regulation is ineffective if it’s implemented in just one country. This is a perfect excuse for the centralization of a stricter and stricter authority such as the one Europeans have in Brussels.
It would be so much easier, more effective, more geopolitically understandable and certainly more humanitarian if those sanctions were a thing of the past…
