Lithuania strengthens the supervision of the cryptocurrency sector. From November 2022, the country will ban anonymous accounts and set out more detailed requirements for customer identification.
Main changes that come into force:
- Prohibition to open anonymous accounts or accounts with fictitious names (shall come into force on November 1, 2022).
- Beneficial owners or members of the management board cannot be found guilty under the criminal code (shall come into force on November 1, 2022);
- Same MLRO or AML Officer can only perform functions in one company, unless the company is a part of group (shall come into force on November 1, 2022).
- Virtual currency exchange or depository wallet operator must have an authorized capital of at least EUR 125 000 (shall come into force on December 31, 2022 for already authorized crypto companies and in November 1, 2022 for new crypto companies).
- Threshold for customer identification is reduced to EUR 700 during occasional transactions (shall come into force on January 1, 2023). Before it was EUR 1000.
- All virtual currency exchange and depository wallet operators will be publicly listed by the Registrų Centras (shall come into force on February 1, 2023).
- The AML Law identifies specific customer information that must be collected, kept, and transferred for the transaction recipient’s virtual currency exchange or depository wallet operator or the financial institution (shall come into force on January 1, 2025).
- Companies will need to comply with local Lithuanian presence requirements
Regulation regarding the virtual asset service provider’s (VASP) authorization in Lithuania is still sufficiently flexible and attractive when the goal is to have cryptocurrency company in the European Union. As one of the earliest members of the European Blockchain Partnership (EBP), Lithuania has stated its support for the cross-border delivery of digital services while at the same time complying with security and privacy standards. At present, Lithuania has over 250 digital assets firms registered in the country.
Companies have a choice of two types of cryptocurrency company authorization: virtual currency exchange or depository wallet operator. Lithuania requires cryptocurrency companies to register with the country’s Centre of Registers. Registrants must adopt comprehensive KYC and AML procedures and are expected to inform the Financial Crime Investigation Service (FCIS) about large transfers. Companies that are registered as virtual currency exchange operators are not supervised as financial service providers. They have no right to provide any financial services, including investment services. More information about cryptocurrency company authorization can be found here.
ECOVIS ProventusLaw currently is one of the most experienced VASP authorization advisors in Lithuania. It helped to authorize more than 15 companies including one of the world’s biggest crypto exchanges. ECOVIS provides a full set of services for cryptocurrency exchange and cryptocurrency depository wallet operator authorization including company registration, consultation on AML/CTF process requirements and preparation of required policies and procedures, risk management framework, as well as compliance support function for the companies which have launched their activities. Experts of ECOVIS ProventusLaw are also ready to perform a gap analysis of your existing processes and procedures.