Lithuania has been a popular cryptocurrency country due to its efforts to form regulations working with the crypto community to encourage its development. But with EU regulations coming down the pipe, regulations will get more stringent, but Lithuania seem like it will try to ease how those affect ICOs and exchanges.
Lithuania is located in Europe (EU): The countries of the European Union hold a patchwork of individual attitudes towards cryptocurrency regulation, but all of them also fall under the jurisdiction of the EU Commission.
Cryptocurrency trading in Lithuania
Lithuania’s public sector seems to embrace the notion of blockchain technology and cryptocurrencies. The Bank of Lithuania has seen fit to launch a regulatory sandbox service, dubbed LBChain, to serve as an environment for researchers assessing regulatory approaches to foster economic growth.
But the Bank has also blasted cryptocurrencies, stating:
‘Virtual currency is an instrument involving high risk, while profiteering on it may lead to significant losses of funds. Therefore, in order to protect the customers of financial institutions, financial institutions legally operating in our country and supervised by the Bank of Lithuania must strictly dissociate themselves from this product type in their activities. An illusion that virtual currencies are supervised or safe can in no way be created.”
In January the EU came out with new directives on cryptocurrencies, asserting that “gaps still exist in the oversight of the many financial means used by terrorists, from cash and trade in cultural artefacts to virtual currencies and anonymous pre-paid cards. This proposal seeks to address those gaps while avoiding unnecessary obstacles to the functioning of payments and financial markets for ordinary, law-abiding citizens and businesses, so balancing the need to increase security with the need to protect fundamental rights, including data protection, and economic freedoms.”
Mostly focused on ending anonymity among the crypto community, and preventing nefarious individuals from buying, funding, or selling orgs or resources. It does include the sharing of company and individual information with public entities at times, and affects exchanges and wallets.
Regulation of ICOs in Lithuania
ICOs previously were fostered in a sandbox environment with light touch regulations, but the Banks previous statements also applied to ICOs as well as crypto and given the new EU regulations a harsher regulatory environment seems on the horizon.
In December, the government of Lithuania stated it plans to regulate ICOs, approaching each one individually. The deccions is explained as:
“For example, when coins have features of securities, a prospectus, approved by the regulator, should be drawn up and they should be subject to other requirements of the Law on Securities. Depending on the nature of offering, legal acts regulating crowdfunding, collective investment, and provision of investment services, the secondary market or the formation of a financial market participant’s capital would similarly be applied.”
Cryptocurrency markets in Lithuania
Lithuania has a vibrant crypto community due to its limited policies regulating ICOs, attracting a number of start-ups.
IBC’s planning and strategy team can provide expert advice on ICOs in different jurisdictions. If you’re thinking of holding an ICO in COUNTRY and you’d like more information, contact us here.
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