Cryptocurrency is gaining more relevance and adoption even in formerly conservative environments. In 2020, Lithuania joined the ranks of crypto-friendly countries around the globe. The country has seen an increase in virtual asset companies since then.
Lithuania recently launched a new regulation for Virtual Asset Service Providers (VASPs), which is set to have a significant impact on the cryptocurrency market. The final part of this new regulation is the creation of a Register for VASPs, which was launched in early February 2023. Currently, there are around 260 companies that have been added to this register. However, according to fintech and crypto consultancy Gofaizen & Sherle, the majority of VASPs are expected to be added to the list in the near future. We will see the result of this effort in a few months.
The Register of VASPs will make it easier for users to access and analyze licensed crypto companies operating in the region, resulting in a transparent and trustworthy environment for the industry. These developments can potentially turn Lithuania into a profitable and efficient crypto market.
Here is all you need to know about Lithuania’s cryptocurrency regulations.
The Legal Frameworks for VASPs Operation in Lithuania
Crypto laws vary across regions and countries, with some laws more stringent than others. Lithuania requires crypto firms to obtain a crypto license for proper registration. The Government of Lithuania revised the AML/CTF LAW for cryptocurrency firms.
Under the revised laws, Registry Centras will publicly display the list of companies offering virtual currency exchange services. Also, the Government trimmed down the list of VASPs operating in the country from around 800 to approximately 200. This reduction seeks to checkmate illegal activities and properly regulate cryptocurrencies in the region.
The two kinds of VASPs available in the region now are; Virtual currency exchange operators and Virtual currency wallet operators.
Here are notable changes to the legislation for crypto operators:
- It is possible to acquire a single crypto license in Lithuania. The commercial register (Registry Centras) will supervise the requirements for the process.
- The minimum capital for a cryptocurrency company increased to 125,000 EUR.
- The VASP must have a local AML manager working for only one cryptocurrency company.
- A senior manager of the company must be a permanent resident of Lithuania.
- Members of the management team and supervisory bodies must not have a criminal record.
Visit this site for a comprehensive list of the updated laws.
How To Get Crypto Authorization in Lithuania
Acquiring a VASP license in Lithuania has a well-ordered procedure. The first step is submitting a note to the relevant authorities. Check the other steps below.
- Register A Company in Lithuania: To obtain authorization, register a limited liability company with a minimum share capital of 125,000 EUR in the administrative account at a local bank.
- Compliance with AML/CFT Documentation: Develop and implement AMT/CFT measures and incorporate them into the company’s internal activities.
- Registration For Cryptocurrency and Virtual Asset Exchange Activities: To obtain a crypto license, notify the relevant authorities. Then the company will be registered either as a virtual currency exchange operator or a crypto depository wallet operator. The company must feature in the Register of Legal Entities of Lithuania.
- Creating an administrative account: this account is vital for all virtual asset service providers for a reliable payment channel for their clients.
- Involve an officer: A virtual asset company will require the services of a money laundering report officer (MLRO) or anti-money laundering (AML) officer. This officer will monitor all transactions and submit a notice for suspicious transactions to the regulatory bodies.
- Notify the regulatory body of the responsible persons implementing regulatory measures: All companies that exchange or store virtual assets must notify the Financial Crime Investigation Service (FCIS) in written form. Also, contact details of the director and other personnel in the fight against money laundering are necessary.
Conclusion
Lithuania has made it mandatory for all virtual asset service providers (VASPs) to join the commercial register. While the list already has over 260 companies, more are adapting to the new legislation and will be listed soon.
Also, the Lithuanian Government recently amended its requirement for VASPs in the country. These amendments are detailed in a document and are now operational in the region. The new crypto regulations seek to combat money laundering and terrorist financing while protecting the interests of crypto users. The latest regulation is part of the Lithuanian government’s supportive stance towards the development of the crypto market by creating a favorable economic environment where young professionals in the region can actively contribute towards the growth and development of the crypto market, making the country a healthy and dynamic area for investment and innovation.