Inteliumlaw

Crypto License in Lithuania

Inteliumlaw » Everything You Need to Know About Crypto Licenses » Crypto License in Lithuania

Crypto license in Lithuania is quite popular solution for crypto businesses. The jurisdiction established its crypto regulation in 2020, after that interest in this country for businesses engaged into crypto activity significantly increased.

Despite the fact of implementation of stricter rules for this industry in 2022 by Bank of Lithuania, the Ministry of Finance, and the Financial Crime Investigation Service (FCIS or FNTT (Lithuanian: Finansinių nusikaltimų tyrimo tarnyba), the country is still more attractive than an Estonian option. It easily could be nominated as one of the “leading crypto hubs” in EU area, taking the second place after Poland.

It is for sure worth five minutes of your attention to read more about Lithuania crypto regulation, requirements and “licensing” regime below.

What is the Lithuania Crypto License?

The term "Lithuania Crypto License" is frequently used, but the legislation of the country does not have a licensing regime specifically designed for crypto asset providers. The existing regulatory framework operates on an "authorization" principle, permitting crypto businesses functioning without strict licensing requirements. The term "Lithuanian Crypto license" in this article should be understood as the authorization process required for any virtual asset service provider in Lithuania before offering crypto-related services.

The Lithuanian government allows the business to use virtual currencies along with FIAT (traditional financial services) and electronic money, engage in activities related to cryptocurrencies, such as exchanges and wallet services. This license is popular for possibility to operate within the European Union due to Lithuania's compliance with EU laws and regulations, which makes it easier for businesses to expand their services across Europe.

The license ensures that all crypto businesses operating in Lithuania follow strict standards of transparency, security and legal compliance. This includes requirement to comply with Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations. Modern proactive approach to regulating the crypto space has made Lithuania crypto license an attractive place of interest for many crypto businesses with a reputable jurisdiction in which to operate.

The Crypto License in Lithuania: key benefits

Opting for a crypto license in Lithuania offers many benefits for crypto businesses:

  • Access to the European market: Obtaining a crypto license in Lithuania opens doors to the European markets and European Economic Area (EEA), providing extensive opportunities for expansion and outreach. Therefore, licensed entities can offer their services to a broad audience while adhering to the strict legal frameworks set by the EU.
  • Fintech Hub opportunities: Lithuania is recognized as a leading fintech hub, providing an ideal environment for business incorporation within this sector, stimulating a supportive ecosystem for cryptocurrency ventures.
  • Relatively fast Process: The authorization process for obtaining a Lithuanian crypto license (covering both crypto exchange licenses and crypto wallet service provider licenses) generally takes about 5 to 6 weeks, enabling a quick setup for enterprises.
  • Cost-Effective Structure: Benefit from relatively low running costs, including a corporate income tax rate of 15%, helping businesses manage ongoing financial obligations efficiently.
  • Tax Benefits: Newly formed entities enjoy a 0% tax rate on taxable profits during the initial taxable period. Furthermore, a reduced rate of 5% is applicable if income stays below 300,000 EUR.
  • Remote Operations: Lithuania’s regulatory framework permits remote processes, removing the necessity for a physical office presence and providing flexibility in business operations
  • Сomprehensive compliance: clear requirements ensure all operations related to crypto activities are transparent and secure. Companies must implement strict AML and CTF procedures.This not only protects the business from legal risks but also grows trust with customers and partners.
  • Quick and simple application process. In comparison to other EU countries, Lithuania offers a more convenient path to obtaining a license, which can be a crucial factor for entities seeking to launch their services operatively.

Licensing for virtual currencies in Lithuania provides two forms of licenses (authorization):

  • An exchange license for cryptocurrencies enables companies to exchange cryptocurrency for capital, or for another cryptocurrency, and receive a fee for the services.
  • Custodian license for crypto wallets. Cryptocurrency wallets can be operated by a licensed company, including the generation and storage of encrypted client keys. Similar to savings accounts or personal storage for digital assets and currencies instead of traditional money.

Cryptocurrency License in Lithuania: costs

The scope of the Crypto License Lithuania is comparatively wide covering many crypto related activities.

Obtaining a Crypto License in Lithuania allows a business to provide particularly the following services:

  • Cryptocurrency exchange and trading which offers customers services for buying, selling, and exchanging cryptocurrencies both for fiat money and between different cryptocurrencies. This allows private investors and corporate clients to easily manage their digital assets.
  • Digital wallet and storage services: Licensed exchanges use advanced technology to protect data and funds. With them companies can offer custody and management of clients' digital assets. This is important for businesses that want to serve both as individual and institutional clients, offering them a secure platform for storing and managing their cryptocurrencies.
  • Crypto Transfers: VASPs may conduct various crypto transactions providing an efficient and secure space for movement of digital currencies, particularly under a crypto wallet license.

Special attention should be paid to ICO (Initial Coin Offerings) projects. It is important to note that they may be subject to different regulatory frameworks in Lithuania, depending on their legal classification. When utility tokens can be considered within the offered “licensing” regime, certain ICO might potential touch upon crowdfunding and securities regulation in the country.

Lithuania Crypto Exchange License: requirements for obtaining

The Lithuania Crypto Exchange License is a permit that covers activity of businesses that operate cryptocurrency exchanges. This permit allows companies to facilitate transactions between different cryptocurrencies, as well as between cryptocurrencies and fiat currencies. It is designed to ensure these transactions are conducted in a secure, transparent and legally compliant manner, protecting both the exchange operators and their clients.

Below are some key requirements for obtaining Crypto License in Lithuania:

  • Notification of Regulatory Authorities: operators must notify the Register of Legal Entities in Lithuania within 5 working days of starting or ceasing their activities. Notification should include confirmation of compliance with anti-money laundering and counter-terrorism financing regulations.
  • Key personnel: operations must appoint an AML specialist (senior manager) who is a resident of Lithuania.
  • Financial Obligations: must have a minimum registered authorized capital of 125,000 euros.
  • AML and CFT Measures: Management personnel responsible for implementing AML and CFT measures to collaborate with the Financial Crime Investigation Service (FNTT) and notify the FNTT within 7 working days of any appointment or change. These members cannot represent multiple entities together, except within the same corporate group.
  • Reputation and Cleanliness: Individuals with senior roles or beneficiaries of these entities must not have a criminal record for serious or very serious crimes, either in Lithuania or abroad, ensuring a clean legal history.
  • Company incorporation: icludes registering the company with the Lithuanian Register of Legal Entities and fulfilling all necessary legal and administrative requirements.

Cryptocurrency License Lithuania: application process

The registration process for obtaining a Cryptocurrency License Lithuania is briefly described below. To enter the Lithuania crypto license register the operators can consider the following steps.

Step 1 Preliminary check

  • engagement of Inteliumlaw and collection of necessary information: Initial discussions with owners/representatives, formalization of engagement document with our company and gather essential information and documents.
  • legal assessment: at this stage our specialists conduct a comprehensive legal evaluation of the project, ensuring alignment with regulatory requirements.

Step 2. Incorporation of the company

  • preparation and submission of the necessary documents: Assistance in preparing incorporation documents and securing the company name to the Lithuanian Register of Legal Entities.
    Such documentation includes the company’s articles of association, details of shareholders and directors, and proof of the company’s registered office in Lithuania.
  • company registration: Facilitate company registration in the Company Register to establish the initial authorized capital of 2500 EUR.

Step 3. Regulatory notification

Prior to regulatory notification Crypto Licensing (authorization) process will require the following actions:

  • Increase of share capital to the required EUR 125,000.
  • Documentation Preparation: Assist in preparing necessary documents for crypto business authorization including drafting of AML/KYC/KYT policies for the crypto project based on the information provided by the client.
  • AML/KYC Officer Appointment and Training: Assist in identifying and selecting a suitable candidate for the position of AML Officer, meeting regulatory requirements and client expectations. Provide operational integration and training based on the client’s business model. The members of the board of directors as well as the owners of the company must have impeccable reputations and no criminal records.
  • Authorization Process: Notifying FCIS/FNTT about the selected candidate for the position of AML specialist.
  • KYC/KYT Provider Selection: Aid in choosing compliant providers adhering to Lithuanian AML regulations.
  • Prepare a detailed application for the cryptocurrency license. This application should include a business plan outlining the company’s proposed activities, target market, and strategies for compliance with AML and CTF regulations.
  • Implement policies for AML (KYC, transaction monitoring) and Data protection (GDPR) compliance. Additionally, the application must provide information on the company’s organizational structure, including the roles and responsibilities of key personnel, and details about the company’s internal control mechanisms.
  • Compliance with financial requirements: Company may ensure that have the required minimum capital, which may vary depending on the type of services provided and prepare financial documents that demonstrate your company’s financial stability.

Once the application is complete, it is submitted to the Financial Crime Investigation Service (FCIS) for review. The FCIS will assess the application to ensure that the company meets all legal requirements, including financial stability and compliance with regulatory standards. If the application is approved, the company will be granted a cryptocurrency license, allowing it to legally operate within Lithuania’s jurisdiction. The entire process typically takes several months, depending on the complexity of the application and the responsiveness of the applicant.

Step 4. Ongoing Compliance

Ongoing Monitoring: Regularly monitor AML officers’ activities, ensuring compliance and assisting in communication with regulatory bodies.

Lithuanian Crypto License regulation

Legal Frameworks for crypto operation in Lithuania includes such acts:

In Lithuania, the primary regulatory authority overseeing cryptocurrency activities is the Financial Crime Investigation Service (FCIS). This body is responsible for issuing licenses, monitoring compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, and ensuring that companies operating within the cryptocurrency sector adhere to both national and European Union (EU) laws. FCIS plays a crucial role in maintaining the integrity of the financial system by preventing illicit activities such as money laundering and fraud.

Another key regulatory body is the Bank of Lithuania, which, while primarily focused on traditional financial institutions, also provides guidance on the application of financial regulations to cryptocurrency businesses. The Bank of Lithuania ensures that the financial stability of the country is upheld, and it works closely with FCIS to monitor the impact of cryptocurrencies on the broader financial market.

Together, these authorities create a regulation that supports innovation in the cryptocurrency sector and at the same time ofeers safe environment for consumers. Their supervison helps Lithuania to be considered  as a reputable and secure jurisdiction  for cryptocurrency businesses.

Companies that have obtained a crypto exchange license in Lithuania are required to comply with regulatory requirements and provide regular reports:

  • Annual and quarterly reports on the company’s financial operations, ensuring transparency and accountability.
  • Documentation of internal processes and management strategies to maintain a high level of operational control.
  • Maintain documentation and regular reports on compliance with AML and KYC policies, ensuring all transactions are legal and secure.
  • The company with a crypto exchange license in Lithuania is required to comply with European and Lithuanian data protection laws, including the General Data Protection Regulation (GDPR).

After the adoption of Regulation 2023/1114 of the European Parliament and of the Council on markets in crypto-assets (“MiCA”) at the European level, countries are required to implement various amendments to align with the new, more uniform regulatory framework established across the European Union.

While current Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CTF”) regulations are in place to combat money laundering, terrorist financing, evasion of international sanctions, and fraud, the new regime aims to enhance transparency, ensure financial market stability, and safeguard consumers from the speculative risks associated with the crypto-assets market. Now its actively working to adapt and clarify their regulatory environments to meet these new standards.

Following this, operators in Lithuania’s virtual currency sphere are required to be in compliance with  stringent legal protocols, necessitating the establishment of high quality internal policies and control procedures. These cover many important aspects:

  • Customer Identification: Use careful methods to identify and verify clients and beneficiaries.
  • Risk Management: Provide a comprehensive assessment and develop strategies to effectively eliminate identified risks.
  • Monitoring Procedures: Implement organized procedures for effective control of business relationships and transactions.
  • Sanctions Compliance: Strictly follow international financial sanctions and restrictive measures.
  • Reporting Requirements: Procure opportune submission of reports and information to the Financial Crime Investigation Service (FNTT).
  • Record-Keeping: Process and hold on information in accordance with legal requirements.
  • Updating identification data: Systematically update customer and beneficiary identification data.
  • Employee Training: Conduct training sessions to inform employees about measures to combat money laundering and terrorist financing (making guidelines).

Starting January 1, 2023, strict identity verification is required for virtual currency transactions over 700 EUR, including deposits and withdrawals. For transactions exceeding 15,000 EUR, operators must provide detailed identification for both individuals and entities involved.

Additionally, from January 1, 2025, enhanced data transmission requirements will apply to companies with a crypto license in Lithuania.

Leave Us A Message

And we wil get back to you
Contact Us

Legal and Regulatory Compliance

Operators in Lithuania's virtual currency sphere are mandated to adhere to stringent legal protocols, necessitating the establishment of robust internal policies and control procedures. These encompass various vital aspects:

  • Customer Identification: Implementation of rigorous methods to identify and verify customers and beneficiaries.
  • Risk Management: Comprehensive assessments and strategies to manage identified risk types effectively.
  • Monitoring Procedures: Structured procedures to monitor business relations and operations efficiently.
  • Sanctions Compliance: Stringent implementation of international financial sanctions and restrictive measures.
  • Reporting Requirements: Timely submission of notifications and information to FNTT.
  • Record-Keeping: Proper management and storage of information as mandated by the law.
  • Data Updating: Regular updates of customer and beneficiary identification information.
  • Employee Training: Organizing training sessions to familiarize employees with anti-money laundering and terrorist financing prevention protocols.

Starting January 1, 2023, stringent identity verification protocols become mandatory for virtual currency exchange operations or transactions exceeding 700 EUR, including deposits or withdrawals from virtual currency depository wallets.

Additionally, virtual currency operators initiating transactions above 15,000 EUR or equivalent amounts in foreign or virtual currency must provide comprehensive identification data for both natural persons and legal entities involved in the transactions.

Furthermore, effective from January 1, 2025, stringent data transmission mandates will be in effect for companies under crypto license Lithuania regime.

Leave Us A Message

And we wil get back to you
Contact Us

FAQ

What is a crypto license, and why is it required in Lithuania?

A crypto license in Lithuania is a mandatory permission (authorization process) for VASPs providers before offering crypto-related services to comply with EU laws and regulations.

What documents needed to obtain a crypto license in Lithuania?

To obtain a crypto license in Lithuania you will need to prepare following documents:

  • Passport copies of individuals, the owners, board members, final beneficiaries and the AML officer.
  • Address confirmation documents for all involved parties.
  • Recent criminal record checks (not older than 3 months) for all involved parties.
  • Power of Attorney to incorporate remotely.
  • business model and specific activities related to cryptocurrency services description of the company.
  • Curriculum vitae of all participants involved.
  •  Website`s Information related with offering services.

How can I benefit from obtaining a crypto license in Lithuania for my business?

A crypto license in Lithuania gives you an opportunity to conduct crypto related operations within the EU and international clients.

What are the key activities allowed under a Lithuanian crypto license?

Key activities allowed: cryptocurrency exchanges, crypto wallet services and crypto transfers. Moreover, some ICOs correspond with specific authorization procedures applicable to crypto operations.

Is it mandatory to have a banking account to obtain a crypto license?

Yes, it`s need to establish the initial authorized capital.

What are the capital requirements for opening a cryptocurrency company in Lithuania?

The share capital should be of EUR 125,000.

How long does it take to secure a Lithuanian crypto license?

Usually it takes between 3-6 months (including the application process, document preparation, and regulatory review). However, it may differ depending on the complexity of the case and regulatory considerations.

Are there any restrictions on non-resident directors for crypto companies in Lithuania?

No, directors can be non-residents of the country.

What advantages does Lithuania offer as a jurisdiction for cryptocurrency-related activities?

Below are listed several of them:

  • Transparent, clear and flexible regulatory framework.
  • Acceptable tax rates with potential reductions for new companies.
  • Operate remotely without a physical office.
  • Entry to the EU market and international clients.
  • Quickness of the process (within 5-6 weeks).

What is the validity period of a cryptocurrency license in Lithuania?

The cryptocurrency license in Lithuania has no validity period.

Are there any expected changes in regulation of crypto assets services providers?

The Markets in Crypto-Assets regulation entry into force from December 30, 2024.  This will for sure affect the rules for crypto licenses in Lithuania. The implementation date is till July 1, 2026. Lithuanians authorities are working to make the changes faster. The goal of new regulation is to eliminate risks with money laundering, terrorism, and fraud. After enactment of MICA service providers would be required to follow regulations and consumer protection standards with strict control from the Bank of Lithuania and the Financial Crime Investigation Service (FCIS).

Inteliumlaw closely monitors these changes to ensure our clients compliance with updated requirements.

Other services

Leave a request for a service

The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.

By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.

LEAVE A REQUEST FOR A SERVICE

The accumulated experience and tracking of future changes in this area allow us to be proactive
for our clients and develop the most adapted business structures to modern conditions.

By submitting this form, you hereby authorize Inteliumlaw to process your information for the purpose of addressing your inquiry. You retain the right to revoke this consent at any point. For further details, please review our Privacy Policy.