PRICE RELEASE Lithuania has strengthened its supervision of cryptocurrency sectors. Gofaizen & SherleInternational legal and management consultancy firm, based in Europe, has taken initiative to help businesses navigate these new regulations. The new law will be in effect as of November 2022 according to Lithuanian regulators. The country will also ban anonymous accounts and impose stricter requirements regarding customer identification.
Gofazen & Sherle, which has helped over 500 companies across 30 countries, has a physical presence in Estonia, Lithuania and Germany.
New Lithuanian Regulations
According to the Lithuanian Ministry of Finance, the national government has approved changes to the country’s anti-money laundering (AML) and counter-terrorism financing regulations that affect the cryptocurrency sector. New laws approved by the Ministry of Finance will make it easier for users to identify themselves and ban anonymous accounts. New regulations will also place stricter requirements upon exchange operators. Beginning January 1, 2023 Crypto exchange operators must register as corporations with a capital minimum of 125,000 euro. Additionally, the top management of these companies must be residents permanents in Lithuania.
According to Lithuania’s Finance Minister, Skaiste, the country decided to update its regulations in response to recent events in the region, particularly the ongoing military conflict in Ukraine.
Since Estonia tightened crypto regulations, Lithuania has witnessed a significant increase in crypto company operations. These entities only eight were created in 2020. In contrast, there were 188 registered new companies in 2021. Another 40 were added during the first month of 2019. The finance ministry reports that there are over 400 cryptocurrency service providers in Lithuania.
Estonia Crypto Clampdown
Estonia’s new regulations represented a sharp U-turn for a country with a population of just 1.3 million but which last year was home to more than half of the world’s registered virtual-asset service providers (VASPs).
The new rules, which went into effect on June 15, required Estonian crypto companies to meet new transparency requirements; they can no longer have anonymous accounts and must have at least €100,000-250,000 in capital.
Estonia has been a pioneer in regulating cryptocurrency-related services. The regulatory environment was not very strict and entry barriers were low until recently. The existing laws that regulate cryptocurrency have been amended to improve clarity and control. The requirements to provide cryptocurrency-based trading, trade, transfer and wallet services are more similar to European e-money institution and other licensed financial service provider.
The number of licenses issued has fallen from 1305 in 2019, to only 81 in 2021. The new regulations have caused a substantial decline in this number.
Lithuania will not be like Estonia
Many crypto enthusiasts fear that Estonia, once a global hub for cryptocurrency will be renamed. Gofazen & Sherle lawyers, on the other hand, is providing businesses with a legal and convenient way to navigate the turbulent waters by receiving instructions from the FCIS in October and devising a strategy to help businesses thrive regardless.
About Gofaizen & Sherle
Gofaizen & Sherle is a leading legal & business consultancy for digital assets-oriented businesses, investment funds and financial organizations focused on EU markets while expanding globally. Tallinn is its headquarters, with representatives in Lithuania, Czech Republic and Poland. It offers services such as company registration, financial licensing, including crypto-businesses, EMI and other licenses.
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