Lithuania, one of the European jurisdictions that has been known to be quite friendly to cryptocurrencies, is following Estonia and starting to strengthen its AML measures to exercise greater oversight over digital assets.
The Lithuanian Ministry of Finance (MoF) together with the country's Central Bank announced the approval of new amendments to the Law on the Prevention of Money Laundering and Financing of Terrorism, applicable to cryptocurrencies.
According to the authorities, the new measures will strengthen the country's regulatory framework and help minimize the risk of operating with crypto assets.
In a release Recently, published by the MoF, the Lithuanian authorities indicated that the country must increase and strengthen its controls Anti-Money Laundering (AML) to more efficiently manage the risk of anti-money laundering and money laundering, as well as other risks related to the emerging cryptocurrency sector.
The ministry also noted that the new measures will help Lithuania increase the transparency of the crypto sector, ensure its development is sustainable and create better operating conditions for digital asset companies and service providers.
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The Seimas of the Republic, the country's parliament, must approve the amendments to the Law on the Prevention of Money Laundering and Financing of Terrorism for them to come into force.
More KYC controls and ban on anonymous cryptocurrency accounts in Lithuania
The amendments approved by the MoF and the central bank include the establishment of Stricter requirements for customer identification (KYC) and ban on anonymous cryptocurrency accounts. This is in order to increase the transparency of the crypto sector.
The new measures will also require digital asset service providers have a minimum capital of 125.000 euros and that their managers are permanent residents of Lithuania, in order to be able to have the approval of the central bank and operate legally in the country. The measure also includes make public the list of digital asset service providers and entities registered and authorized in Lithuania, from February next year. This is also a measure with which Lithuania seeks to increase the transparency of the crypto sector.
The new legal provisions will also enable the country to more effectively implement anti-money laundering and counter-terrorist financing measures, the MoF said. It also noted that the legal provisions will help Preventing the evasion of economic and trade sanctions with cryptocurrencies.
Lithuanian Finance Minister Gintarė Skaistė said that with the new regulations the government can ensure that there is no attempt to circumvent Western sanctions imposed against Russia through the use of cryptocurrencies and digital assets.
The Lithuanian Financial Crime Investigation Service (FNTT), the Ministry of Interior and the Competence Centre for the Prevention of Money Laundering also gave the green light to the new amendments to the Lithuanian Law on the Prevention of Money Laundering and Financing of Terrorism.
Lithuania wants to regulate cryptocurrencies before MiCA law
Although the approval of the “Markets in Crypto Assets” bill, known as MiCA, which will regulate the cryptoasset market, including exchanges, is still being debated in Europe, Lithuania has begun to proactively tighten its legislation against the crypto industry based in the country, just as Estonia has not done.
According to the Lithuanian government, the rapid growth of the cryptocurrency market and the constant emergence of new products within it, accentuate the need for stricter controls to guarantee both the security of investors and participants and the financial stability of the European nation.
In 2021, the Bank of Lithuania authorized the issuance of licenses to companies and service providers with cryptocurrencies, in order to offer fair conditions for their development and growth.
Furthermore, in 2020 Lithuania became the first country in Europe to issue a digital currency, called LBCoin, through its central bankThis digital currency was launched as an experiment to help citizens understand what cryptocurrencies are and at the same time to commemorate 100 years of Lithuania's independence.
Seen as one of the most crypto-friendly countries, Lithuania's strict legal provisions may make it lose its appeal for innovation.
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