Lithuania is reported to be working on cryptocurrency regulations which surpass Europe’s Anti-Money Laundering Directives for their prohibitive impact.
The new changes are likely to put pressure on the cryptocurrency space as the government in Vilnius attempts to tighten its control.
Lithuania’s central bank has also been canvassing commercial banks and exchanges to get a clear picture of cryptocurrency and the role it may have in the future of the country’s financial sector, which is seen as encouraging for entrepreneurship in the space. However, the Bank of Lithuania recently declared that financial market participants should not get involved in crypto-related activities and should refrain from providing any crypto related services.
The country has recently become a growing center for ICOs and crypto projects. Latest figures show that Lithuania is now attracting an impressive 10% of all global ICO investments, with cryptocurrency bringing in half a billion euros from such activities. This in part to the government’s liberal stance on regulation, which is clearly about to change.
The new rules will require a far more rigorous registration process requiring that companies applying to operate in Lithuania adheres to comprehensive know your customer (KYC) and anti-money laundering procedures. Also, large transfer will now need to be reported to the country’s Financial Crime Investigation Service (FCIS).
The rules will cover both crypto-to-crypto transactions as well as fiat-based business, and all companies acting as intermediaries in any such deals will need to check client identity under Lithuania’s laws on the Prevention of Money Laundering and Terrorist Financing. Sigitas Mitkus, Director of Lithuania’s Finance Ministry’s Financial Market Policy Department explained:
“We want to create a transparent legal environment for virtual currency exchanges, depository wallet operators and ICO initiators. We also want to contribute to ensuring better consumer protection.”
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