Hey guys,
Lithuania allows legal entities which are incorporated in Lithuania to engage in cryptocurrency exchange and/or cryptocurrency wallet/brokerage operator activities. There are 2 types of cryptocurrency activity authorization (company can provide both cryptocurrency services or one of the following):
– Cryptocurrency exchange operator is the company exchanging cryptocurrency owned by the client for the commission fee;
– Cryptocurrency depository wallet operator is the company managing client cryptocurrency depository wallets. Or in other words, custody services.
Supervisory authority does not issue any license to engage in these activities. It is just required to submit a notification with all required documentation to the respective authorities regarding such a company’s business in order to be authorized to provide such services. This means that there is no assessment of the business plan, shareholders, no license fees, etc. Companies engaged in cryptocurrency exchange and/or cryptocurrency wallet/brokerage operator activities are only supervised by Financial Crime Investigation Service (FCIS).
FCIS as supervisory authority supervises the company’s activity and its compliance to AML/KYC requirements. Requirements are applicable not only in the onboarding process (identifying client, collecting information and supporting documents about client’s UBO, CEO, management structure, etc.) but also shall be performed during the client’s ongoing monitoring (revision of documents collected during onboarding process, suspension of a suspicious monetary operation or transaction, notification regarding transactions exceeding 15 000 EUR, employee training, etc.). Legal acts require that the Company must appoint a senior staff member (AML officer) to organize the implementation of measures, to prevent money laundering and terrorist financing, and be appointed as a contact person to communicate with FCIS. It is not mandatory that the appointed person would be Lithuanian. However, as the Company needs to be in compliance with AML/KYC requirements, communicate with FCIS, and report suspicious transactions, it would be advisable to have a local AML officer.
In order to provide crypto-related services following steps shall be taken:
I. Company in Lithuania has to be incorporated.
Requirements for the Company:
- Minimum authorized capital of the company 2,500 EUR;
- Company shall open a deposit bank account in a Lithuanian credit institution in which monetary contributions for capital shall be transferred;
- Company shall have a director and AML officer (doesn’t have to be Lithuanians);
- No mandatory office space is required. The company might have a virtual address only.
II. Notify FCIS and Center of Register.
Actions that shall be taken prior to notifying authorities:
- AML officer shall be employed and State Social Insurance Fund informed regarding his/her employment.
- Gather evidencing documents that the director and UBO of the company meet the requirements of impeccable reputation.
- Prepare and approve respective AML/KYC procedures of the Company.
- Prepare notification, forms, and auxiliary documents for submission to FCIS and Centre of Register.
These actions shall not be considered as barely significant. By notifying institutions company confirms that it has taken all actions required and is in compliance with all applicable legal acts.
Once the company will notify the register regarding engagement of crypto activities, the company’s official commercial register will indicate the company’s engagement in these activities.
Are you thinking about building a crypto business? We can help with the legal part!
Lithuania allows legal entities which are incorporated in Lithuania to engage in cryptocurrency exchange and/or cryptocurrency wallet/brokerage operator activities. There are 2 types of cryptocurrency activity authorization (company can provide both cryptocurrency services or one of the following):
– Cryptocurrency exchange operator is the company exchanging cryptocurrency owned by the client for the commission fee;
– Cryptocurrency depository wallet operator is the company managing client cryptocurrency depository wallets. Or in other words, custody services.
Supervisory authority does not issue any license to engage in these activities. It is just required to submit a notification with all required documentation to the respective authorities regarding such a company’s business in order to be authorized to provide such services. This means that there is no assessment of the business plan, shareholders, no license fees, etc. Companies engaged in cryptocurrency exchange and/or cryptocurrency wallet/brokerage operator activities are only supervised by Financial Crime Investigation Service (FCIS).
FCIS as supervisory authority supervises the company’s activity and its compliance to AML/KYC requirements. Requirements are applicable not only in the onboarding process (identifying client, collecting information and supporting documents about client’s UBO, CEO, management structure, etc.) but also shall be performed during the client’s ongoing monitoring (revision of documents collected during onboarding process, suspension of a suspicious monetary operation or transaction, notification regarding transactions exceeding 15 000 EUR, employee training, etc.). Legal acts require that the Company must appoint a senior staff member (AML officer) to organize the implementation of measures, to prevent money laundering and terrorist financing, and be appointed as a contact person to communicate with FCIS. It is not mandatory that the appointed person would be Lithuanian. However, as the Company needs to be in compliance with AML/KYC requirements, communicate with FCIS, and report suspicious transactions, it would be advisable to have a local AML officer.
In order to provide crypto-related services following steps shall be taken:
I. Company in Lithuania has to be incorporated.
Requirements for the Company:
- Minimum authorized capital of the company 2,500 EUR;
- Company shall open a deposit bank account in a Lithuanian credit institution in which monetary contributions for capital shall be transferred;
- Company shall have a director and AML officer (doesn’t have to be Lithuanians);
- No mandatory office space is required. The company might have a virtual address only.
II. Notify FCIS and Center of Register.
Actions that shall be taken prior to notifying authorities:
- AML officer shall be employed and State Social Insurance Fund informed regarding his/her employment.
- Gather evidencing documents that the director and UBO of the company meet the requirements of impeccable reputation.
- Prepare and approve respective AML/KYC procedures of the Company.
- Prepare notification, forms, and auxiliary documents for submission to FCIS and Centre of Register.
These actions shall not be considered as barely significant. By notifying institutions company confirms that it has taken all actions required and is in compliance with all applicable legal acts.
Once the company will notify the register regarding engagement of crypto activities, the company’s official commercial register will indicate the company’s engagement in these activities.
Are you thinking about building a crypto business? We can help with the legal part!
