Investing in Crypto with Estonian Company

Investing in Crypto with Estonian Company

10 June 2022

Crypto is finally in another bull cycle

People who were part of the last bull cycle have waited for 4 years for this. And this time, it’s the perfect storm.

With everything that’s happening in the world – Covid, the final phase of the long-term debt cycle, money printing, social issues – bitcoin is a hedge that even the biggest financial institutions and even governments can not ignore.

And with a lot of money pouring into cryptocurrencies, the prices are bound to go higher. And when prices go higher, FOMO kicks in. This leads us to an eventual euphoria phase of the bull cycle before everything crashes down again. Perhaps not to the same lows as before, but we’re going to see a strong price correction at the end of the bull cycle.

However, I do think it’s going to be different this time. At least for bitcoin, which is seen as a scarce asset now. Compared to 2017, we have a lot more institutional money invested in BTC, including major corporations like Tesla and Square. We also have a lot more established infrastructure.

But this post is not about my opinion or what I think about the bitcoin price. It’s about investing in cryptocurrencies with your Estonian company. This is something that we’re frequently asked about.

The first question is – can you buy cryptocurrencies with your Estonian corp as a client of Comistar? Yes, you can. It’s 100% legal, and you can have bitcoin in your company balance just like other investments. We, as a service provider, don’t have any limitations set to our clients on investing in cryptocurrencies. Some service providers don’t support that, but as we’re also active investors in this space since 2017, then it’s natural that our clients also want to have such exposure.

The important thing is to keep track of what you’re holding and what’s the value of the assets. Because once you go down the crypto rabbit hole, you can have 50 different cryptos which values fluctuate a lot on a daily basis.

It’s also likely that you’re using several different exchanges and wallets to store your cryptos. Because of that, it’s likely that you won’t be able to extract the balance of your crypto assets where all your holdings with their current values are seen.

As a result, it’s advisable to keep an excel document with the assets that you hold. This excel document can be updated at the end of each month, and the EUR value highlighted for each asset. This helps us to keep track of your company balances at any given time (for example, you may require a company profit statement and a balance sheet, and you want to have correct data shown).

While keeping that kind of excel is sufficient for us, you want to be able to prove how you acquired the cryptos in case the authorities ask about this. For example, if you take part in an IDO (Initial Dex Offering), and the token you bought does 1500x in value – all of a sudden you might be holding a big bag of cryptocurrencies with a lot more value than you first invested in fiat money.

And once you’re taking profits to your bank account, the bank will have AML-related questions about how these funds were acquired. And you better be able to explain that as otherwise, you can’t have the money in the bank account.

In short, this is all you have to do if you want to invest in cryptos with your Estonian company. But please bear in mind that if you want to provide crypto-related services as your main activity, it’s likely that you need to obtain a license.

If you have any questions about the Estonian licenses, please reach out to us.