Lithuania is taking cryptocurrency regulation seriously.
The institutions of the European Union are urged to expedite the process of regulating cryptocurrencies in consideration of the growing number of crypto-asset service providers in Europe, current global challenges, and the increased risk of money laundering and terrorism financing associated with virtual currencies.
In an effort to combat money laundering and potential plans by Russian elites to dodge financial sanctions, Lithuania is intensifying its oversight of cryptocurrencies.
On Thursday, Lithuania’s Finance Ministry has outlawed anonymous wallets and enforced regulations on crypto exchanges in a bid to curb money-laundering, and other related nefarious activities.
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Lithuania To Ban Non-Custodial Crypto Wallets
If passed by the Lithuanian legislature, the proposed revisions to the current law will tighten the rules for user identification and prohibit anonymous accounts. According to officials, the move was done in preparation of future European Union decisions.
The law proposes, among other things, to tighten know-your-customer (KYC) laws for cryptocurrency exchanges and to require managerial staff of exchanges operating in Lithuania to be permanent residents of the nation.
Lithuania’s Finance Ministry has banned anonymous wallets and imposed new rules on crypto exchanges (Bitcoin.com).
The Registrar of Legal Entities will make public the names of operators of cryptocurrency exchanges.
In addition, the proposal underscores the stringent regulations with reference to the fast growth of the crypto industry and the unique geopolitical concerns.
Adding More Teeth To Crypto Regulation
Given the international regulatory trends and the geopolitical situation in the region, where many Western nations impose financial and other sanctions on the Russian Federation and Belarus, it was emphasized that more sophisticated regulation of the providers of crypto-services is also required.
The proposed legislation would also increase the requirements placed on exchange operators. Beginning on January 1 next year, they will be required to register as a corporate entity with a minimum nominal capital of 125,000 euros.
Following the tightening of restrictions in its neighboring country, Estonia, the number of crypto firms in Lithuania has grown dramatically.
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Crypto total market cap at $1.21 trillion on the daily chart | Source: TradingView.com
FCIS To Intensify Oversight
In view of the enormous efforts of the authorities to minimize the risks posed by the activities of crypto-asset services providers, it is anticipated that the Financial Crime Investigation Service (FCIS) will intensify its inspections of these firms.
Recently, the European Parliament voted to approve anti-anonymity regulations for the cryptocurrency industry, which would significantly complicate transactions between non-custodial wallets and crypto service providers.
The proposal has been challenged by numerous proponents of cryptocurrencies, including Coinbase CEO Brian Armstrong.
Despite the fact that the cryptocurrency industry has achieved a prominent place in the global financial sector, it continues to be viewed with skepticism and suspicion by some.
Featured image from The Coin Republic, chart from TradingView.com