Running a cryptocurrency business can be lucrative, but areas without specific regulations regarding their function can put them at risk of violating existing laws.
In Lithuania, the Ministry of Finance is working to remedy this concern by announcing the upcoming release of legal amendments, which would impact the operation of crypto businesses within the Republic. This annoucement was originally reported by The Baltic Times today.
In the report, the ministry says that they want to ensure that companies involved with or related to the crypto industry have more legal certainty about what they need to do. These regulations cover crypto exchanges, wallet operators, and initial coin offerings (ICOs), even though the latter has been dying out recently.
With new legal requirements imposed, there will be the creation of policies that help to protect the country from money laundering and terrorism financing. These requirements will ensure that consumers are protected as well, considering that every crypto-related company will have to register with the Center of Registers to qualify as a legal entity.
They will also be subjected to the Law on the Prevention of Money Laundering and Terrorist Financing, Know Your Customer laws, and high-volume reporting protocols with the Financial Crime Investigation Service (FCIS).
According to the publication, every operator has to have identification processes for users, and those identifying documents must be verified for any operation value beyond 1,000 euros. The director of the financial market policy department of the finance ministry, Sigitas Mitkus, said that the European Union directive will oversee the new limits being practiced.
Mitkus further noted that Lithuanian could become the first country in the world that takes the Financial Action Task Force’s (FATF’s) recommendations and turns them into requirements for cryptocurrency. An updated document was released by the Bank of Lithuania this year that reflects the official stance of crypto assets and ICOs.
The stance includes a policy that prohibits financial market participants from being paid in crypto, though they can receive payments in fiat currencies.
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