9:26 PM · Jan 3, 2022 Tweetstorm originally posted on Twitter

#Estonia and #crypto.

I had my run-in with the Estonian state over #Bitcoin back in 2014 (see: http://btc.ee )

Here are some of the important lessons I learned about the country.

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The fundamental clash:

- They don't really like crypto. They only want tech they can fully control.

- They have a great PR thing going, trying to make the country look cool around tech.

Unfortunately the laws aren't made, and supervisory agencies aren't controlled, by the people in charge of PR, but rather by those who want absolute control.

The Estonian state likes control.

Just open a Telia law enforcemnent diclosure report. You'll see things like "in Estonia a direct access system is used." and "Since 2019, due to a technology change, Telia Estonia has no visibility to the data regarding Lawful interception."

In #Estonia the state does not need to present a warrant to a telecom company, nor can a telecom company check the validity of a warrant, because the state has "direct access" to all communications.

https://teliacompany.com/globalassets/telia-company/documents/sustainability/law-enforcement/law-enforcement-disclosure-report_march2020.pdf

Back in 2014, Estonia tried to ban Bitcoin. First by making the buying and selling of #Bitcoin virtually impossible.

They required a trade to be conducted in person for instance. And they picked out two victims to make an example and scare off others.

More details: https://btc.ee/appeal.html

Secondly they tried to levy VAT on the full value of Bitcoins traded. Estonia's VAT attack on #Bitcoin was executed at the EU level:

https://coindesk.com/markets/2014/12/11/estonia-vat-should-apply-to-full-value-of-bitcoin-trades/

Imagine having pay 20% VAT on top of the price of a Bitcoin! That would kill any legal trade. They knew that of course, yet they tried.

Thankfully the European Court of Justice eventually rejected Estonia's attempt to backstab #Bitcoin.

What should be clear though by now, to anyone reading, is that #Estonia historically doesn't really have a very good attitude towards #crypto.

The people who executed those attacks are still in power, and their friends are in power. Iirc one of them even got promoted to represent Estonia at FATF. Not hard to guess how unfriendly to #crypto that person's influence at FATF is.

Back in 2014 they had never passed any law mentioning Bitcoin, nor published any information regarding to their classification of Bitcoin, but they started to apply a secret interpretation in the most negative way possible to a few Bitcoin enthusiasts they could identify.

Secret interpretations of the law! It harks back to darker Soviet days, but we can report that the art has still not been lost in Estonia!

Who is to say that with these new laws, they aren't going to have some very negative secret interpretations again, which they will only reveal after they have picked some victims to try to apply their view to?

This has always been their modus operandi in the crypto space - and the worst thing is that even the supreme court allows it.

As the courts allow it... it will obviously happen again.

Back in 2014 Estonia had failed to register their extension of AML laws with the European commission, as they were legally obliged to, yet the supreme court did not see it fit to require such a registration before applying the extension.

Yet at the same time, besides allowing for secret interpretations of laws, the supreme court even denied me my constitutional right to remain silent.

https://btc.ee/self-incrimination.html

What this shows is that while the supreme court applies the laws as narrowly and harshly as possible to individuals, it gives the state and its agencies all the room to violate EU law as well as basic constitutional rights like the rights against self-incrimination.

So:

1. Don't count on the courts to reign in an out of control executive.

2. Go with the most negative possible interpretation of any law, and assume that to be the way the FIU will one day apply it when it suits them.

Maybe most importantly: Realize that Estonia is a very very small country, all the people in power know each other.

Seperation of power becomes very theoretical when everyone in power is somehow related through family, school, university, or shared sexual experiences.

You on the other hand are the foreigner. You have no connections, and you can barely understand their cryptic language.

In one court session the judge was clearly displeased that I made a statement in English. They also provided no translators, I had to bring my own.

The whole system in #Estonia is rigged against you.

In conclusion, take these new laws very seriously. Their design isn't some mistake, it fits exactly with who they truly are! These new laws are exactly what they want.

If you are already in Estonia, prepare your plan B elsewhere.

If you're not yet in Estonia, save yourself the aggravation and don't start. Just say NO to #eResidency

Thanks for reading!