Earlier this week, local news agency Delfi reported that the country is working on implementing sweeping new regulations for cryptocurrency transactions, and things are looking on pace for approval. According to the publication, Lithuania’s new laws would require all crypto-related businesses to provide details of all their clients.
Delfi reported that the new regulations were approved by the country’s parliament on Wednesday, although a time frame for nationwide implementation hasn’t been set just yet. If there’s one thing the report is sure of, it’s that the country wants to formalize the activities of all crypto-based exchanges, in a move to adhere to the European Union’s Anti-Money Laundering (AML) requirements.
Also, it was reported that once the rules come into effect, all crypto-based transactions above €1,000 ($1,127) will be reported to the Financial Crime Investigation Service (FCIS). These requirements will be imposed on all transactions, regardless of type and final destination. Essentially, transactions worth over the stipulated amount and involving Lithuania in any way will have to be reported, with details of the individuals engaged in them.
As for Initial Coin Offering (ICO) promoters, the identification and reporting requirements will kick in as soon as a sale hits the €3,000 ($3,383) threshold. Also, under the new regulations, the Lithuanian digital asset space will only be open to businesses which are registered with the country’s Center of Registers. These companies will be required to adopt comprehensive AML and KYC standards.
Lithuania is doing the EU one better
Speaking on the rationale for the move, Sigital Mitkus, the Director of the Financial Policy Department at Lithuania’s Ministry of Finance, said that the government is looking to improve transparency in the crypto industry’s legal landscape, while also fostering improved customer protection.
He emphasized that by introducing these regulatory limits, the Lithuanian government is going beyond the precepts of the fifth EU Anti-Money Laundering Directive.
He added, “We will probably become the first in the world to implement the FATF [Financial Action Task Force] recommendations and apply the requirements not only to the conversion of virtual currency to traditional ones and vice versa but also when converting one virtual currency into another.”
Regulators have acknowledged Crypto
The introduction of these regulations is coming at a time when crypto businesses all over the world are being scrutinized by regulators. While it’s still to be seen how the companies themselves would react or adapt to this, it’s getting clearer that European regulators are beginning to recognize the prominence of digital assets.
However, this recognition comes strict regulations, which could be a sign of worry for crypto users. This week, as Blockonomi reported, the Financial Action Task Force (FATF), an agency which helps develop financial best practices for hundreds of countries across the world, is gearing up to publish a report on how its member countries should address their native cryptocurrency sectors.
Citing a statement from Alexandra Wijmenga Daniel, a spokesperson for the FATF, the publication noted that the agency’s directive will address the recommended operations of token and asset-dealing businesses, including crypto exchanges, wallet providers, and crypto hedge funds.
Per the report, most of these businesses will also be required to collect data on users involved in crypto transactions above $1,000 or €1,000. This information will include details on the senders and recipients of the funds. the data, in turn, will be sent to the recipient’s service provider.