Crypto firms now operating inside Lithuania’s jurisdiction will face a strict licensing procedure. When this program launches next year, it will likely force many digital asset enterprises to close their doors.
Approximately 580 cryptoasset enterprises are now registered in Lithuania, according to Bloomberg’s Wednesday report. However, board member Simonas Krepsta of the central bank believes that fewer will succeed in getting full operating licenses in the end.
That should be the end of the licensing procedure by June 2025, says Krepsta. The crypto ecosystem in Lithuania will not accept applications that do not adhere to the specified standards.
While Lithuania was successful in luring forward-thinking banks, it also attracted a large number of unlicensed bitcoin businesses. Because of its growing number of cryptocurrency companies, Lithuania may become the target of new rules enacted in the country and across Europe.
Under regulatory frameworks with no control, the crypto business failed, according to Krepsta. He informed Bloomberg that there is enough proof of this in the US, other European nations, and Lithuania as well. “The industry took a serious hit due to the many failures and embezzlement instances that came to light.”
A reputation as a safe sanctuary for cryptocurrency entrepreneurs has grown in Lithuania. The country’s legal system, which allows cryptocurrency transactions with no restrictions, is a contributing factor. An additional selling point for Lithuania among crypto enthusiasts is the country’s traditionally easy company registration procedure.
On November 29, 2023, the government imposed stricter anti-money laundering (AML) legislation. In an effort to crack down on terrorist funding and money laundering, the government passed a proposed anti-money laundering bill (AML) together with eight others.
Lithuania is planning to take preventative measures by strengthening its own crypto legislation in the time leading up to the implementation of the European Markets in Crypto Assets Regulation (MiCA). Before MiCA takes the wheel, this preemptive strategy seeks to address possible problems growing in the crypto industry.
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