Following EU Directive, Lithuania will ban anonymous wallets
Europe’s recent ban on transfers between unhosted wallets and centralised exchanges has already had an effect.
Cryptocurrency exchanges in Lithuania have been subjected to stringent rules by the Finance Ministry in an effort to prevent money laundering and terrorist funding. The ministry said it had taken the decision in anticipation of future EU rulings.
Cryptocurrency restrictions in Lithuania are expected to be tightened and the use of anonymous wallets will be outlawed by the Lithuanian government.
The government adopted modifications to the “Law on the Prevention of Money Laundering and Terrorist Financing” on Wednesday, according to the Ministry of Finance, with the goal of increasing openness in the cryptocurrency industry while also guaranteeing its “sustainable continued growth.” Before it can become law, the modifications must be accepted by Lithuania’s parliament, the Seimas.
The bill aims to prohibit the formation of “anonymous accounts,” improve KYC procedures for cryptocurrency exchanges, and mandate that managers of Lithuanian-based exchanges be permanent residents of Lithuania, among other things. The identities of crypto exchange operators will be made public by the Registrar of Legal Entities as well.
To fight money laundering, terrorist funding and sanctions evasion from Russia and Belarus and reputational hazards for Lithuanian market players and the Lithuanian state, the Finance Ministry cited these steps as justifications.
“Taking proactive actions to tighten regulation at national level in readiness for forthcoming choices at [European Union] level,” Finance Minister Gintaras Skaists said.
Anti-anonymity measures for the cryptocurrency sector were recently approved by the European Parliament, making transactions between non-custodial wallets and bitcoin service providers far more difficult. Many bitcoin enthusiasts, including Coinbase CEO Brian Armstrong, have voiced their displeasure with the proposal.
Following Estonia’s tightening of regulations, the number of crypto firms in Lithuania has risen quickly in recent years. As of 2020, there were just eight crypto firms, but since then, more than 220 have been formed, according to the Finance Ministry.