Crypto Regulations in Liechtenstein
If you wonder if cryptocurrency is legal in Liechtenstein, the answer is yes. One can own and transact using cryptocurrencies in Liechtenstein. The FMA oversees participants in the financial markets, including those involved in the cryptocurrency industry, and establishes the framework for legal and regulatory purposes.
Source: Coin Telegraph
Owning and using cryptocurrency for transactions is legal in Liechtenstein. In fact, Liechtenstein Blockchain Act (TVTG) provides a comprehensive framework for the nature of crypto assets and related services.
Source: Notabene
Liechtenstein’s stable political climate, successful banking industry, and the existence of one of the most advanced blockchains and crypto regulatory frameworks make Liechtenstein a haven for cryptocurrency platforms. On January 1, 2020, Liechtenstein’s Blockchain Act, which established a comprehensive regulatory framework, came into effect. The Act, formally named the Act on Tokens and Entities Providing Services Based on Trusted Technologies (TVTG), protects investors, combats money laundering, and establishes regulatory transparency.[3] The act regulates ‘Trustworthy Technology’ (TT), defined as technologies in which the integrity, assignment of tokens to TT identifiers, and disposal of tokens are ensured. The act defines tokens as information on a TT system that represents rights assigned to one or more TT identifiers. The Act does not classify tokens, leaving the possibility of a token invoking financial market laws if the token constitutes a security or financial instrument.
Source: Freeman Law
The new Liechtenstein Blockchain law regulates civil law issues concerning investor protection and asset protection. The legal framework also introduces adequate supervision of the various virtual asset service providers and crypto companies. The supervision of blockchain companies is conducted by the Financial Market Authority(FMA) in Liechtenstein. Liechtenstein is known for its AAA rating by Standard and Poor’s and its strict measures to combat Money-Laundry and Know-Your-Customer requirements. These measures are now also extended to blockchain companies by making service providers subject to anti-money laundering and combating the financing of terrorism rules.
Source: LCX
In September 2020, the European Commission presented its draft on the regulation of crypto assets, which aims to establish a pan-European framework for the regulation of crypto assets of all types and related services and issues. The proposed regulation in particular aims to remove EU-wide regulatory barriers to the issuance, trading, and post-trading of tokenized financial instruments, while respecting the principle of technology neutrality, and to expand sources of funding for companies through increased issuance of new cryptocurrencies (ICO’s) and tokenized financial instruments (STO’s).
Source: Niedermuller
Under Liechtenstein’s tax legislation, cryptocurrency trade is subject to a material approach. Different tax regulations apply depending on the rights of the particular token and whether it qualifies as a utility or payment token.
Source: Coin Telegraph
The individual countries were assessed on the basis of 19 criteria. All of these aim to make the taxation of crypto assets understandable. In Liechtenstein, there are no specific rules in force for the taxation of digital assets. However, the taxation of such assets is derived from existing tax regulations. The report also highlights the blockchain law introduced in Liechtenstein in January 2020. In so doing, the principality created a legal basis for the token economy. However, the law did not entail any legislative changes to tax regulations.
Source: Liechtenstein
As there are various forms of crypto exchanges, diverse regulations apply in this regard. Exchanges that match buying and selling interests (matched principal trading; multilateral) with regard to utility tokens against fiat and/or cryptocurrencies are service providers that are subject to a due diligence regime and must be registered with the FMA. Now that the Blockchain Act is in force, there is no longer a need to obtain a trade license. This notwithstanding, settlement in fiat is regarded as a regulated payment service (especially since the commercial broker exemption is no longer applicable under the EU Second Payment Services Directive when acting on both the buy side and the sell side).
Source: Mondaq
In Switzerland and Liechtenstein, the crypto assets investment ecosystem continues to grow and mature, despite market volatility and declining trading volumes, a new report by the Institute of Financial Services Zug (IFZ) of the Lucerne University of Applied Sciences and Arts (HSLU) shows. The second edition of the Crypto Assets Study, released earlier this month, gives an overview of the current state in the Swiss and Liechtenstein crypto assets investment ecosystem, delving into the key trends that have emerged over the past year and the developments that have been observed.
Source: FinTech News
Ilya “Dutch” Lichtenstein, 34, and his wife, Heather Rhiannon Morgan, 31, are accused of helping to “wash” 119,754 Bitcoin pilfered from Bitfinex and allegedly transferred into a digital wallet controlled by Lichtenstein, a dual citizen of both the U.S. and Russia, prosecutors announced. Court documents describe an incredibly complex investigation carried out by special agents with the IRS, FBI, and the Department of Homeland Security.
Source: The Daily Beast
A recent report from Inside Paradeplatz reveals that the Liechtenstein Financial Supervisory Authority has rejected Binance’s attempts to acquire a stake in Union Bank AG (UBAG), which has been on the verge of liquidation since 2019. The rumors further spread today after the cryptocurrency Exchange denied all such media reports, which also claimed that the banking regulator has denied UBAG request to install CEO Changpeng Zhao as a major shareholder in the bankrupt bank.
Source: Finance Magnates
Although there is no regulatory sandbox, the Financial Market Authority has a department dedicated exclusively to fintech inquiries. Moreover, the Liechtenstein government invested significant amounts of time and effort in drafting the Blockchain Act, which aims to enhance legal certainty within this space.
Source: Mondaq
