Lithuania, along with the EU, is taking significant steps towards regulating the crypto market with the new MiCA (Markets in Crypto-Assets) regulation and the recently adopted Lithuanian Crypto Asset Market Law. These important legal changes will create a platform of transparency, security, and reliability for crypto market participants.
What Changes?
Crypto asset service providers and asset-referenced token issuers must obtain licenses or be registered with the appropriate regulatory authorities to operate within the EU. Companies will need to meet strict capital requirements, governance, and risk management standards. Transactions involving crypto assets will be monitored similarly to traditional money transfers.
Crypto asset service providers will have to operate as a joint-stock company (AB) or a private limited company (UAB), with mandatory governance bodies such as the general shareholders' meeting, the board, and the CEO. Executives must have an impeccable reputation and sufficient qualifications and experience to perform their duties. An audit of annual financial statements is mandatory.
Under the new law, the Bank of Lithuania will license the following entities:
- Asset-Referenced Token (ART) issuers;
- Crypto Asset Service Providers (CASPs).
Electronic Money Token (EMT) issuers will continue to be licensed under the Law on Electronic Money and Electronic Money Institutions, with additional requirements set out in the new law.
How are Crypto Market Participants reacting to the New Legislation?
At an informational event organized by the Bank of Lithuania, "Preparation for the Implementation of MiCA Provisions," the results of a survey of Lithuanian financial market participants were shared. When asked, "Do you intend to provide services related to crypto assets after MiCA comes into effect?" 89% of respondents answered "NO."
The event took place a couple of months ago. We hope that during this time, the opinions of market participants have changed and that more of them will apply for a license.
In turn, the Bank of Lithuania aims to ensure that mature market participants who understand the risks of this business enter the crypto asset market.
Information from the Bank of Lithuania for those intending to obtain a license: https://www.lb.lt/lt/micar
What are the Deadlines?
Some provisions of the MiCA regulation and the law related to ART and EMT issuers came into effect on June 30th of this year, with other provisions coming into effect on December 30th of this year. Crypto asset service providers must obtain a license by June 1, 2025, to continue providing services.
How can ExpertLab assist in the Licensing Process?
- Help clarify needs and opportunities;
- Assist in preparing and submitting the application and all required documents and information;
- Lead the licensing project from the first steps to finalization.
