If the parliament approves the law in the upcoming session, it will go into force later this year.
On June 8, the local Ministry of Finance of the Republic of Lithuania issued a statement regarding the prevention of money laundering (AML) and the war against terrorist financing. The parliamentary republic is reportedly seeking to increase the transparency of the cryptocurrency sector. Finance Minister Gintarė Skaistė expanded on such an objective in Lithuania and stated:
"The main objective is to ensure greater transparency in the sector and more effective implementation of the prevention of money laundering and terrorist financing.”
The draw law issued by the government seeks to lay down more detailed requirements for customer identification. On top of that, residents in the country won’t have the possibility to open anonymous accounts anymore, which will supposedly ensure the transparency of crypto service providers.
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The government also plans to tighten up the requirements for heads of various companies providing crypto-related services. If the law passes, managers in the country will have to be permanent citizens of the Republic of Lithuania with a minimum of 125,000 euros in nominal capital. On top of that, they’ll have to ensure that their companies won't provide any services or carry out activities exclusively in other countries outside Lithuania.
From February 1st, 2023, Lithuania’s Register of Legal Entities will also have to submit a report with the list of those individuals providing crypto-related services, as well as crypto wallet providers.
The official statement expands on such strict laws imposed by Lithuania’s government, citing the crypto industry’s rapid expansion and various geopolitical risks:
“More nuanced regulation of the suppliers of crypto-services is also important considering the international regulatory tendencies and the geopolitical situation in the region when many Western countries impose financial and other sanctions on Russian Federation and Belarus.”
The draft law will be submitted to the Seimas in the current session. If approved, many amendments to the law would go into effect later this year.
Lithuania is currently seeing significant growth in the number of crypto-related companies. For instance, last year, 188 new crypto-related organizations set their foot in the country, whereas in 2020, 8 digital asset service providers kickstarted their operations. Currently, there are a total of 252 cryptocurrency businesses functioning in Lithuania.