The Vilnius government has approved amendments introducing stricter regulations for the country’s growing crypto space. The legislation aims to manage the risks associated with crypto-assets and prevent Russian attempts to circumvent Western sanctions imposed during the war in Ukraine.
Lithuanian authorities to toughen rules for crypto industry
Lithuania is preparing to revise its law on the prevention of money laundering and terrorist financing with the stated aim of ensuring greater transparency and sustainable development of its cryptocurrency sector. This week, the government approved the amendments that the small Baltic nation plans to adopt before the next European regulations.
The new provisions were prepared by the Ministry of Finance, the Bank of Lithuania, the Financial Crimes Investigation Service, the Ministry of Interior and the Lithuanian Competence Center for the Prevention of Money Laundering. Their main goal is to further regulate the operations of crypto service providers.
Finance Minister Gintarė Skaistė was quoted by her department as saying that the rapid growth of the crypto market and the emergence of new products require additional attention from responsible authorities in risk management, in particularly those related to money laundering and terrorist financing threats. She clarified:
In this context, we are taking proactive steps to strengthen regulation at national level in preparation for subsequent decisions at EU level.
The bill, which is expected to be submitted to the Lithuanian parliament during the current session and implemented this year, is expected to introduce more detailed rules for customer identification and ban the opening of anonymous accounts. It will also increase the required share capital of service providers to €125,000.
Only permanent residents of Lithuania will be allowed to operate businesses dealing with cryptocurrencies. Lithuanian regulators also want to ensure that these entities do not provide services or operate exclusively in other jurisdictions. The full list of registered operators of crypto exchange and custody platforms will be made public from February 1, 2023.
Lithuania is also updating its regulations in response to recent events in the region, in particular the ongoing military conflict in Ukraine. “The relevance of the proposals is enhanced by the current geopolitical environment – we must ensure that no attempt is made to circumvent Western sanctions against Russia using crypto assets,” Minister Skaistė stressed.
Since Estonia tightened its crypto regulations, Lithuania has seen rapid growth in the number of crypto companies starting operations in the country. Only eight such entities were created in the whole of 2020, while in 2021, 188 new companies were registered, followed by 40 more in the first months of this year. More than 250 crypto service providers are currently operating in Lithuania, the Ministry of Finance revealed.
Do you expect the upcoming Lithuanian regulations to significantly worsen the business climate for crypto businesses? Share your thoughts on the subject in the comments section below.
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Lithuanian Government Approves Tougher Crypto Regulations – Bitcoin Regulation News
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