Lithuania plans to introduce mandatory licenses for cryptocurrency companies in order to reduce their number, which currently stands at around 580 firms.
The country’s central bank will start the pre-assessment procedure for obtaining a license from July, and full regulation should be in place by June 2025.
Exchanges that already have licenses in other EU countries may not need additional authorization in Lithuania. At the same time as local regulation, MiCA legislation will start to apply across the EU from January 2025.
According to Krepsta, the new regulation is aimed at preventing the misuse of digital assets to launder money or defraud investors.
“The crypto industry has failed in an under-regulated environment. We have seen quite a few bankruptcies, cases of embezzlement and the like, which have been a real blow to the industry,” he added.
The Lithuanian Central Bank also plans to invest in educational programs for its employees to learn in-depth about the business models of cryptocurrency companies.
Seeking to educate its employees will allow them to gain a better understanding of cryptocurrency firms and their business processes.
As a reminder, in September 2023, Lithuania was named the second most attractive jurisdiction in the EU for cryptocurrency firms, behind only Poland.
However, the analysis of the activities of these companies also revealed several dozen cases of fraud, money laundering, sanctions evasion and illegal financing of criminal organizations.
