Lithuania, one of the Baltic tigers that has in past few years demonstrated it doesn’t shy away from new technologies and the digital economy, is preparing to introduce stricter rules for crypto companies. The government in Vilnius is working on amendments that according to officials will go beyond the requirements of the latest, fifth EU Anti-Money Laundering Directive.
Going Beyond What Brussels WantsThe former Soviet republic, which became one of Europe’s major crowdfunding hotspots, a real token economy hub, is going to implement legal changes that are likely to burden companies in the crypto and fintech sector with more obligations. They are part of the efforts of Lithuanian authorities to step up control over virtual currencies and increase oversight of the economy built around them.
Under the new rules, only entities registered with the country’s Center of Registers will be allowed to operate with digital assets in Lithuania. These companies will have to adopt comprehensive know your customer (KYC) and anti-money laundering procedures. According to the draft, the measures will have to be implemented upon establishing a relationship with a client for the first time. Service providers will be expected to inform the Financial Crime Investigation Service (FCIS) about larger transfers.
The requirements will cover not only operations involving fiat money but also crypto-to-crypto transactions. Companies that act as intermediaries in these deals will be responsible for ensuring compliance with Lithuania’s Law on the Prevention of Money Laundering and Terrorist Financing. That means they will be required to check the identity of their clients before providing any services.
Sigitas Mitkus, director of the Finance Ministry’s Financial Market Policy Department, explained the government’s intentions:
“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.” Speaking to the BNS news agency, he emphasized that by introducing certain limits for financial operations, Lithuanian authorities are going further beyond the fifth EU Anti-Money Laundering Directive (AMLD 5).
“We will probably become the first in the world to implement the FATF [Financial Action Task Force] recommendations and apply the requirements not only to the conversion of virtual currency to traditional ones and vice versa, but also when converting one virtual currency into another,” added the Finance Ministry official.
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