Lithuania

Okay, here is the comprehensive report on the current status of retail cryptocurrency trading in Lithuania, structured as requested.

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**Report: Retail Cryptocurrency Trading Status in Lithuania**
**Date:** April 12, 2025
**Prepared For:** Internal Regulatory Assessment
**Prepared By:** Specialized Financial Regulatory Analyst

**Topic: Retail_Trading_Status**

**1. Current Status:** Allowed-Regulated

**2. Narrative Explanation:**

Retail trading of cryptocurrencies (virtual assets) is legally permitted for individual citizens and residents in Lithuania. Individuals are free to buy, sell, and hold cryptocurrencies. However, the environment is strictly regulated, particularly concerning the service providers facilitating these activities. Lithuania has established a specific regulatory framework primarily focused on Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) for Virtual Asset Service Providers (VASPs), which include cryptocurrency exchanges and custodian wallet providers.

Historically, the Bank of Lithuania (Lietuvos bankas) maintained a cautious stance, issuing warnings about the risks associated with cryptocurrencies (volatility, lack of investor protection, potential for illicit use) and restricting regulated financial institutions under its supervision from engaging in most crypto-related activities. However, this stance did not constitute a ban on individuals trading crypto through other means.

The primary regulatory oversight for VASPs concerning AML/CTF currently falls under the Financial Crime Investigation Service (FCIS, or FNTT - Finansinių nusikaltimų tyrimo tarnyba). Lithuania amended its Law on Prevention of Money Laundering and Terrorist Financing to explicitly include VASPs. Key requirements for VASPs operating in or targeting Lithuania include:

*   **Registration/Authorization:** VASPs must register with the Centre of Registers and comply with specific requirements. Lithuania significantly tightened these rules, effective from November 2022, requiring established legal entities (not just branches), increased minimum share capital (€125,000), stricter requirements for senior management (residency, reputation), and enhanced customer identification procedures (prohibiting anonymous accounts).
*   **AML/CFT Compliance:** VASPs must implement robust AML/CFT policies, including Know Your Customer (KYC) procedures for verifying customer identities, transaction monitoring, and reporting suspicious activities to the FCIS.

The regulatory landscape is currently evolving due to the European Union's Markets in Crypto-Assets (MiCA) Regulation. MiCA aims to create a harmonized framework for crypto-assets and related services across the EU. Key aspects of MiCA started applying in June 2024 (for stablecoins) and the rest are expected to apply from December 2024. This will introduce a comprehensive licensing regime for VASPs (termed CASPs under MiCA - Crypto-Asset Service Providers), covering aspects beyond AML/CTF, such as consumer protection, market integrity, and prudential requirements. Supervision under MiCA will likely involve national competent authorities, potentially shifting significant oversight responsibilities for licensed CASPs to the Bank of Lithuania, especially for larger entities, while the FCIS might retain its focus on AML/CTF aspects for registered entities not yet fully under MiCA's scope or below certain thresholds.

In summary, while individuals face no legal prohibition on trading crypto, the platforms they use are subject to increasingly stringent regulations focused on AML/CFT, with a broader EU-harmonized licensing framework (MiCA) progressively coming into effect, further solidifying the "Allowed-Regulated" status.

**3. Supporting Excerpts & Sources:**

*   **Source:** Bank of Lithuania (Lietuvos bankas) - Position on Virtual Assets and Initial Coin Offerings (Updated frequently, reflecting ongoing stance)
    *   **Summary/Typical Stance:** The Bank of Lithuania consistently warns consumers about the high risks associated with virtual assets, such as extreme price volatility, lack of consumer protection mechanisms typical for financial instruments, and susceptibility to fraud and cyber threats. While not banning activity for individuals, it emphasizes that virtual assets are not legal tender and highlights the regulatory focus on AML/CTF for service providers. It also restricts financial institutions it supervises from engaging in most crypto activities, though MiCA may influence future developments. *(Note: Specific dated statements reiterate these points)*.
    *   *(Example Contextual Statement based on past positions):* "The Bank of Lithuania reiterates its warning to consumers about the risks associated with virtual assets... Activities related to virtual assets are generally not regulated or supervised... However, companies providing services such as virtual currency exchange or custodian wallets must comply with anti-money laundering and counter-terrorist financing requirements."

*   **Source:** Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (As amended)
    *   **Summary of Relevant Sections (e.g., Article 2, Article 9):** The law defines 'virtual currency exchange operators' and 'depository virtual currency wallet operators' as obliged entities subject to AML/CTF requirements. This includes mandatory customer identification and verification (KYC), ongoing transaction monitoring, risk assessment, internal control procedures, and reporting obligations to the FCIS (FNTT). Amendments implemented from late 2022 significantly increased the stringency of requirements for these operators, including legal form, capital, management, and identification procedures.

*   **Source:** Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania (FNTT/FCIS) - Information for VASPs
    *   **Summary/Typical Guidance:** The FNTT website provides guidance for VASPs on their legal obligations under the AML/CTF law. It outlines the registration process, requirements for internal policies, customer due diligence (CDD/KYC) measures, and the procedure for reporting suspicious transactions. It emphasizes the strict enforcement of these rules following the 2022 amendments. *(Example Contextual Statement based on guidance):* "Virtual asset service providers, including exchange operators and custodian wallet providers, must register their activities and implement measures for the prevention of money laundering and terrorist financing, including robust customer identification and transaction monitoring."

*   **Source:** Analysis by Lithuanian Law Firms / EU Regulatory Bodies on MiCA Implementation (e.g., Ellex Valiunas, Sorainen, ESMA/EBA websites)
    *   **Summary/Typical Analysis:** Legal and regulatory analyses confirm that Lithuania allows crypto activities but regulates VASPs under its AML framework, overseen by the FCIS. They highlight the significant tightening of national VASP rules in anticipation of, and complementary to, the EU's MiCA regulation. They explain that MiCA will introduce a comprehensive licensing regime across the EU, including Lithuania, likely leading to the Bank of Lithuania taking on a more significant supervisory role for licensed Crypto-Asset Service Providers (CASPs) alongside the FCIS's continued AML focus.

**4. Source Links:**

*   **Bank of Lithuania (Lietuvos bankas) - Position/Warnings (General Area):**
    *   [https://www.lb.lt/en/](https://www.lb.lt/en/) (Navigate to Financial Stability, Warnings, or search for "virtual assets" or "kriptovaliutos" for specific statements/positions)
    *   *Specific past warning example (illustrative):* [https://www.lb.lt/en/news/bank-of-lithuania-warns-consumers-about-the-risks-related-to-virtual-assets](https://www.lb.lt/en/news/bank-of-lithuania-warns-consumers-about-the-risks-related-to-virtual-assets) (Note: Check for the most current statements on their site)

*   **Law on the Prevention of Money Laundering and Terrorist Financing (Consolidated Version):**
    *   Accessible via the Seimas (Parliament) Legal Acts Register: [https://www.e-tar.lt/portal/lt/legalActSearch](https://www.e-tar.lt/portal/lt/legalActSearch) (Search for "Pinigų plovimo ir teroristų finansavimo prevencijos įstatymas")
    *   English Consolidated Version (may have slight delay vs. Lithuanian): [https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.33400?jfwid=-7h6pknv0p](https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.33400?jfwid=-7h6pknv0p) (Ensure you are viewing the latest consolidated version incorporating VASP amendments)

*   **Financial Crime Investigation Service (FNTT/FCIS):**
    *   [https://fntt.lt/en/](https://fntt.lt/en/) (Look under sections related to Prevention, Obliged Entities, or specific guidance for VASPs)
    *   *Specific VASP Guidance Area (Illustrative Path):* Likely under Prevention -> Information for Obliged Entities -> Virtual Asset Service Providers.

*   **EU MiCA Regulation Information:**
    *   European Commission: [https://finance.ec.europa.eu/digital-finance/framework-markets-crypto-assets-mica_en](https://finance.ec.europa.eu/digital-finance/framework-markets-crypto-assets-mica_en)
    *   ESMA (European Securities and Markets Authority): [https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica](https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica)

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**End of Report**
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