Lithuania is another country which has adopted tight crypto regulations. This step was taken to fight money laundering and other schemes that well-heeled Russian elites may resort to. Russia is under tight sanctions from a number of world governments and crypto is a way to get around these sanctions. Lithuania is a small country with a population of less than 3 million and is working hard on maintaining tough scrutiny.
The country’s Finance Ministry made this announcement on June 8th. Other Lithuanian government ministries have taken steps to approve amendments to the Anti-Money Laundering laws and also countering terrorism related financing using crypto. These amendments are expected to be approved by Lithuania’s legislature soon and will result in stiff guidelines. These guidelines will prohibit the setting up and use of anonymous accounts and make identifying users easier.
These regulations are expected to go into effect starting January 1st, 2023. Under the provisions, exchange operators will have to register as a corporate body and declare a capital of at least $125,000 euros. Senior management will also have to be legal and permanent residents of the country.
A government spokesman said that these strict regulations are justified considering the fast growth of the crypto industry and related geo-political risks. Finance Minister Gintarė Skaistė clarified that these steps taken by Lithuania are in accordance with EU wide regulations. Such steps only serve to underscore how fast crypto companies have been growing. Consider this – in 2020, there were just 8 companies and in 2021 – 188.
Neighboring Estonia also updated its AML legislation in 2021 and banned non-custodial software wallets. In Lithuania, the draft laws are yet to be adopted by the government. Once this happens, amendments will go into effect on November 1st, 2022. The other provisions will kick in on January 1st, 2023.