The Ministry of Finance of Lithuania announced that amid growing international tensions and the growth of the crypto industry in the country, there will be new rules for holders of digital assets.
The Ministry of Finance specified that amendments to the legislation will be adopted to combat money laundering and combating the financing of terrorism (AML). After these amendments are approved by the Seimas, the rules prohibiting anonymous transactions in cryptocurrency will come into effect. Digital asset marketplaces will be required to identify their users in order to comply with the Know Your Customer (KYC) rule.
The Ministry of Finance explained that the introduction of more stringent standards is due to the growth of geopolitical risks that Lithuania has faced this year:
“Stronger regulation of crypto service providers is important given the trends in international regulation and the situation in the region, with many Western countries imposing financial and other sanctions on the Russian Federation and Belarus.”
Finance Minister Gintarė Skaistė explained that steps at the national level are being taken in accordance with the upcoming pan-European rules. The official noted that the rapid growth of the crypto industry in Lithuania after tightening regulation in neighboring Estonia began in 2020. According to the minister, two years ago, only 8 cryptocurrency companies were operating in Lithuania, and in 2021 their number has grown to 188.
The new bill will tighten the requirements for exchange operators – from January 1, 2023, they will be required to register as a legal entity with an authorized capital of at least 125,000 euros. Only permanent residents of Lithuania can be the heads of such companies. In 2020, the Bank of Lithuania became interested in the possibility of issuing a state cryptocurrency, which will be used by legal entities and individuals.
