Crypto Regulations in Lithuania
Before applying for a crypto license in Lithuania, you must have a limited liability company (UAB). At the moment, the minimum requirement for the authorized capital of the company is 2500 EUR. From 1.11.2022, under the new legislation, the requirement for the installation capital will be 125,000 EUR.
Source: Gofaizen
The Bank of Lithuania released a statement regarding virtual currencies on October 11, 2017, stating that Lithuanian financial services must clearly dissociate from activities related to virtual currency, basing its position on the financial risks associated with virtual currencies. Disassociation forbids financial market participants from engaging in the sale or exchange of cryptocurrencies, offering payment methods for customers to obtain crypto (using debit or credit cards to purchase crypto), and executing any operations in, or activities similar to, cryptocurrencies. Lithuania regulates exchanges and wallet services through licensing and authorization procedures to prevent money laundering and terrorist financing.[3] Lithuanian companies and Lithuanian affiliates of EU and non-EU companies may apply for crypto registration, and subsequently implement AML/KYC procedures if approved. Other registration requirements include customer identification and verification, reporting to the Lithuanian Financial Intelligence Unit, record keeping, designating an AML compliance manager, and implementing internal control policies and procedures.
Source: Freeman Law
Registration of cryptocurrency-related activities will remain mandatory in Lithuania, and the supervisory authority will be the Commercial Register (Registrų Centras), to comply with the requirements (availability of authorized capital, local exclusive AML officer, etc.)
Source: TET LT
Cryptocurrency activities still considered unregulated With the growing number of crypto-asset services providers (CASPs) in the EU, and in light of today’s global challenges and the increased risk of money laundering and terrorist financing with virtual currencies, institutions of the European Union are called upon to accelerate the process to enable the Regulation on Markets in Crypto-Assets (MiCA) to come into force. While one of the main objectives of MiCA is to reduce the risk of money laundering and terrorist financing and to strengthen consumer protection, the authorities of the European Union Member States are also looking forward to the requirements that will apply to CASPs and are eager to see how it will help supervising authorities to mitigate risks to financial stability.
Source: Sorainen
Lithuania proposed a uniform regulation for digital assets across Europe, to transition from domestic level directives to regulations that are directly applicable and binding across the European Union. According to the Bank, a clear definition of cryptocurrency is needed at the EU level to regulate and treat digital securities or financial instruments in the same manner.
Source: Freeman Law
According to Republic of Lithuania Law on Personal Income Tax, virtual currency is considered property, so income from the sale of virtual currency is taxed in the same way as other income from the sale of assets. This means that taxable income is the difference between acquisition and sale.\
Source: TET LT
In Lithuania, two types of cryptocurrency authorizations can be obtained: Cryptocurrency exchange license and Cryptocurrency wallet license. First type of license allows a company to exchange digital currency to fiat currencies or vice versa, and cryptocurrency to cryptocurrency for a fee. Second type license for companies introducing cryptocurrency wallets to store cryptocurrency, create encrypted client keys, and store them. Both are under the supervision of the Lithuanian Financial Crime Investigation Service (FCIS).
Source: Gofaizen
Exchange operators will also be subject to more stringent requirements under the new regulations. From 1 January 2023, crypto exchange operators will need to register as a corporate body with nominal capital of at least 125,000 euros. Their senior management will also have to be permanent residents of Lithuania.
Source: Chaltons Quantum
Planned changes in the regulation of operations related to crypto-assets in Lithuania On 8 June 2022, the Lithuanian Government approved draft amendments to the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (hereinafter the Law), voting on which is to be held in the Seimas. We have learned earlier that Estonia made regulation of operations of entities dealing with crypto-assets more stringent, and that the United Kingdom introduced new requirements from 1 April 2022. Planned changes to operations of entities dealing with crypto-assets in Lithuania were also announced recently, without waiting for the effective date of the Markets in Crypto-Assets Regulation (MiCA). Plans are to adopt the latter this year, with the effective date in 2025.
Source: Triniti
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The regulatory sandbox allows potential and existing financial market participants to test financial innovations in a live environment under the guidance and supervision of the Bank of Lithuania. The participants of the regulatory sandbox will be selected according to the following criteria
Source: Lietuvos Bankas
