Here is everything we know so far about the new Crypto Regulatory Environment in Lithuania

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Here is everything we know so far about the new Crypto Regulatory Environment in Lithuania
Here is everything we know so far about the new Crypto Regulatory Environment in Lithuania

Lithuania has been one of the first regimes in the world to respond to the impact of cryptocurrencies on financial markets. Lithuania has offered a welcoming regulatory approach since 2018, and a year and a half later – approved regulations establishing a clear legal framework for virtual asset service providers (VASPs).

Crypto License In Lithuanian

It is frequently highlighted that in order to begin crypto-related operations in Lithuania, a special crypto license must be obtained. However, such a picture is incorrect, because rather than obtaining a crypto license, it is required to alert responsible authorities about crypto activities. Crypto procedures can begin when notice is received.

The Lithuanian Financial Crime Investigation Service (FCIS) monitors the actions of cryptocurrency wallet operators and cryptocurrency exchange service providers. The same company may apply for authorization for both forms of crypto activity, and the procedure takes less than a month on average.

To be permitted to provide bitcoin exchange and/or wallet services, a limited liability corporation (UAB) must first be established in the country. The needed minimum capital requirement is 2,500 EUR.

The company formation procedure can be completed without a physical visit; it usually takes around 10 business days to get the necessary original documents.

Typical engagements begin with an analysis of the intended company concept, shareholder structure, and CEO history, allowing us to develop a list of needed papers for an efficient incorporation procedure.

VASPs are subject to AML standards under the Lithuanian Law on the Prevention of Money Laundering and Terrorist Financing (the AML Law), which include customer identification and verification, transaction monitoring and suspension, reporting to authorities, and so on.

As a result, having an internal AML officer is recommended in order to efficiently begin crypto-related activities (preferably, a local one, to ensure that reporting to FCIS will be performed in a due manner).

A practical difficulty that all VASPs confront is the establishment of a long-term banking partnership in order to provide its consumers with a smooth gateway between FIAT currency and crypto.

Lithuania is also a favorable jurisdiction in this regard, as it boasts an ecosystem of approximately 300 fintech companies eager to provide contemporary and innovative financial solutions for blockchain-based enterprises.

Icos/Stos And Forms Of Capital Raising In Lithuania

The Bank of Lithuania established its approach to virtual assets and initial coin offerings (ICOs) in 2017, and it was updated in 2019. Although the supervisory authority stated therein takes a somewhat impartial stance, the essential principles of regulatory treatment are presented.

For example, depending on the kind of offering, an ICO may be exempt from regulatory oversight or subject to regulations governing securities offerings, crowdfunding, collective investment, or the provision of financial services.

Furthermore, the Bank of Lithuania issued its rules on security token offers (STOs), which give a more thorough approach to regulatory requirements depending on the characteristics of tokens provided.

Because existing recommendations are primarily focused on ICOs and STOs, it is expected that fresh guidelines will be produced soon in order to better reflect current crypto sector developments and cover new types of capital raising.

Navigating The Lithuanian Cryptocurrency Regulatory Systems

With a staff that holds crypto sector specialized knowledge as well as significant skills in law, tax, financial accounting, analytics, and business consultancy, “Lewben” can provide a wide range of professional services and advice on how to effectively grow crypto businesses in Lithuania and the EU.

Also Visit: InvestAnswers Tackles about Bitcoin’s Safe-Haven Status

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