The Vilnius government has approved amendments that will introduce stricter regulations for the growing crypto space in the country. The law aims to manage risks associated with crypto assets and prevent Russian attempts to circumvent Western sanctions imposed by the war in Ukraine.
Lithuanian authorities to tighten crypto industry rules
Lithuania is preparing to revise its legislation on the prevention of money laundering and terrorist financing, with the clear goal of ensuring greater transparency and sustainable development of the cryptocurrency sector. This week, the government approved the amendments that this small Baltic country plans to adopt before the upcoming EU regulation.
The new regulations were prepared by the Ministry of Finance, the Bank of Lithuania, the Financial Crimes Investigation Service, the Ministry of Interior, and the Lithuanian Anti-Money Laundering Competence Center. Its main purpose is to further regulate the operation of crypto service providers.
Finance Minister Gintarė Skaistė was quoted by the Ministry as saying that the rapid growth of the crypto market and the emergence of new products require further attention of the responsible authorities to risk management, especially regarding money laundering and terrorist financing threats. She elaborated.
Against this background, we are taking proactive steps to strengthen regulation at the national level in preparation for subsequent decisions at the EU level.
The draft law, which has been submitted to the Lithuanian Parliament and will enter into force this year, is expected to introduce more detailed rules regarding customer identification and prohibit the opening of anonymous accounts. The authorized capital required of service providers will also be increased to EUR 125,000.
Only permanent residents of Lithuania will be allowed to run companies dealing in cryptocurrencies. Lithuanian regulators also want to ensure that these entities do not provide services or operate exclusively in other jurisdictions. The full list of registered operators of crypto exchange and storage platforms will be available to the public from February 1, 2023.
Lithuania is also updating its regulations in response to recent events in the region, in particular the ongoing military conflict in Ukraine. The relevance of the proposal is reinforced by today’s geopolitical environment.” We must ensure that no attempts are made to circumvent Western sanctions against Russia using crypto assets,” Minister Skaistė stressed.
Since Estonia tightened its crypto regulations, Lithuania has seen a surge in the number of crypto company start-ups: in the whole of 2020, only eight such entities were established, but in 2021 188 new companies were registered, and in the first few months of this year another 40 companies followed; more than 250 crypto service providers are currently operating in Lithuania, the Ministry of Finance revealed.
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