The government in Vilnius has approved amendments introducing more stringent regulations for the country’s growing crypto space. It is designed to reduce risks and prevent Russian attempts of circumventing Western sanctions.
Lithuanian Authorities tighten Crypto Industry Rules
Lithuania will soon be revising its Law on Prevention of Money Laundering & Terrorist Financing. This is in the interest of providing greater transparency and sustainable growth for its crypto sector. The government has approved the amendments the tiny Baltic country plans to implement before any EU regulations.
New provisions have been developed by the Bank of Lithuania (Ministry of Finance), the Financial Crime Investigation Service, Ministry of Interior and the Lithuanian Money Laundering Prevention Competence Center. The purpose of these provisions is to improve regulation for crypto service providers.
Finance Minister Gintarė Skaistė was quoted by her department as stating that the rapid growth of the crypto market and the emergence of new products require additional attention from the responsible authorities in managing risks, especially those related to money laundering and terrorist financing threats. She went on:
We are making proactive efforts to enhance regulation at all levels of the country in preparation for EU decisions.
This draft law should be presented to the Lithuanian parliament in the current session. It will then be enforced this calendar year. It will also increase the authorized capital required from service providers to €125,000.
Companies dealing in cryptocurrencies can only be managed by permanent Lithuanian residents. Lithuanian regulators are also concerned about ensuring that such entities don’t provide services to or only operate in Lithuania. From February 1, 2023, the full list of operators registered for crypto-exchange and custody platforms will become public.
Lithuania also updated its regulations to address the current events in the area, including the continuing military conflict in Ukraine. “The relevance of the proposals is strengthened by today’s geopolitical environment — we must ensure that no attempt is made to circumvent Western sanctions on Russia by using crypto assets,” Minister Skaistė emphasized.
Lithuania saw a significant increase in crypto-related companies opening offices in Lithuania since Estonia tightened crypto regulations. In total, eight entities of this nature were set up in 2020. Meanwhile, in 2021 there were 188 registered new companies. Then came 40 more in the first three months of the year. The finance ministry said that Lithuania has more than 250 cryptocurrency service providers.
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