Lithuania is the most popular jurisdiction in the world for starting a cryptocurrency business.
Via our local partners, we offer extended services and turnkey solutions in maximum 4 weeks.
According to new regulations, entrepreneurs intending to launch a crypto-business in Lithuania must deposit a share capital of 125 000 euros as of November 1st, 2022. Furthermore, the new law requires the creation of a specific Lithuania crypto license registration with a list of crypto enterprises, as well as the appointment of an exclusive AML officer. The legal structure of UAB (LLC) enables for the operation of custody wallet operators as well as bitcoin exchange services.
As an outcome, compared to most other European countries for crypto enterprises, Lithuania has the most lightning-fast, cost-effective grasp of the future, with several MiCA Directive concepts currently in place.
VASP companies have the authorization to provide exchange services between various forms of virtual assets (utility tokens, NFTs and coins).
A crypto license in Lithuania allows its holder to provide services for exchanging crypto for fiat currency and vice versa, which means their customers can buy or sell available utility tokens in exchange for currencies such as the US dollar or euro.
The VASP license also allows its operator to store crypto assets on behalf of its clients in custodian wallets, which means that the operator may open a wallet for a customer while keeping the private keys.
Despite the fact that custody of fiat funds is not permitted under the VASP license in Lithuania. The operator can keep the prepayment as a counter-obligation for an infinite period of time, but it must eventually be converted to cryptocurrency.
Virtual Assets Service Providers may organize ICOs, in which an offer to buy the VASP's cryptocurrency is issued for the first time. It is vital to note that during an ICO, the VASP company may only issue utility tokens.
VASPs have an option to apply stacking as a secondary technique for generating passive revenue from cryptocurrencies. Many blockchains employ Proof-of-Stake and related consensus techniques. This is a profitable alternative to traditional crypto keeping and is equivalent to crypto bank deposits.
Authorized VASP has the authority to administer and preserve client cryptocurrency depository wallets, as well as store and provide clients with balance and incoming and outgoing transaction information.
VASP could provide services as an intermediary to move digital currencies from the Client's wallet to a wallet designated by the Client in their order. This service is a cryptocurrency alternative to fiat money wire transactions.
Lithuania Centre of Register is the Lithuanian supervisory body for VASP's Register of licensed crypto companies, but activities related to virtual assets are supervised by Financial Crime Investigation Service (FCIS) - a law enforcement agency under the Ministry of the Interior that is part of the international network of Financial Intelligence Units. FCIS actions aim to prevent money laundering, terrorist financing, and sanctions violations. The Lithuanian FIU is also in charge of financial crime investigations, such as VAT and other tax evasion, money laundering, and illicit receipt or use of EU financial support.
FCIS participates actively in the National Crime Prevention and Combating Corruption Program and is continually creating techniques to engage society in the fight against financial crime. This authority issues orders on a regular basis outlining specific sections of AML/CTF legislation that are directly applicable to the relevant required companies.
FCIS typically supervises crypto firms through targeted examinations that are organized a year in ahead. FCIS publishes a list of enterprises that are being overseen in this manner at the start of the year, but unplanned targeted surveillance is also feasible in specific circumstances.
In 2023, FCIS will also implement regular reporting for VASPs, which will be done annually. Such an approach will very probably increase market openness and allow for a more effective supervisory approach.
Other supervisory authorities: the Bank of Lithuania, Chambers of Notaries, Auditors.
Yes, an AML Officer.
Lithuanian AML law requires VASPs to nominate an AML Officer (leading employee) who will organize the implementation of the AML law's money laundering and/or terrorist financing prevention measures and collaborate with the FCIS. Furthermore, if the company is governed by a board, a board member must be appointed to organize the implementation of money laundering and/or terrorist funding prevention measures. Such staff and board members must be notified in writing to the FCIS within 7 working days of their appointment or replacement.
The AML Officer chosen must have the relevant education, work experience, and skills to apply a risk-based approach throughout the organization. Furthermore, the person's reputation is quite important here.
Following the implementation of the new laws, the AML Officer appointed to a crypto company must be a permanent tax resident of Lithuania, and appointments to more than one VASP are prohibited, so each company with its own AML Officer.
Sanctions for noncompliance with the AML/CTF legislation
There are numerous supervisory authorities (e.g., the Bank of Lithuania, Chambers of Notaries, Auditors, and so on) that are responsible for imposing fines on required companies, but only FCIS may perform inspections, issue orders for the removal of deficiencies, and impose fines on VASPs.
According to Lithuanian AML law, the following actions may be implemented to ensure compliance with VASP regulations:
According to the new regulation, a share capital of 125 000 euros is required to receive the license. The conditions for entrepreneurs looking to create a crypto firm in Lithuania have been strengthened since November 1st, 2022, preparing for MiCA Directive taking place in 2024.
If this amount is to big for you, as a start-up, contact us for evaluation and we can deposit this amount for your project in the 1st year. COINsiglieri is trying to help start-ups to navigate this requirements.
Realistic term for a new, from scratch company, is 3-5 months.
But, we sometimes have ready-made solutions that can take no more than 2-3 weeks. Just ask us about what we have available.
No, there are no required financial audit regulations in Lithuania. However, the regulatory body may undertake periodic audits to ensure that businesses are in compliance with applicable legislation and industry standards.