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Lithuania

Retail_Trading_Status

Allowed-Regulated Unknown
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2025-06-26 12:53
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Executive Summary

In Lithuania, individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies. The regulatory environment is evolving towards increased oversight, particularly aligning with the EU's Markets in Crypto-Assets (MiCA) Regulation. The Bank of Lithuania is the primary authority for licensing and supervising crypto-asset service providers (CASPs), with the Financial Crime Investigation Service (FCIS) overseeing AML/CFT compliance. Lithuania is actively transposing MiCA into its national legal framework, and CASPs are subject to licensing/registration, AML/CFT obligations, capital requirements, and consumer protection measures.

Key Pillars

The key regulatory pillars include the Bank of Lithuania as the primary regulator, responsible for licensing and supervising CASPs. Core compliance requirements encompass strict AML/CFT rules, including mandatory customer due diligence (CDD), Know Your Customer (KYC) procedures, transaction monitoring, and reporting of suspicious activities to the FCIS, along with implementing the 'Travel Rule.' CASPs are required to register and, under MiCA, will need to be licensed, and they are also subject to minimum share capital requirements.

Landmark Laws

  • Law on the Prevention of Money Laundering and Terrorist Financing: Amendments have been made to specifically address CASPs, introducing stricter requirements.
  • Markets in Crypto-Assets (MiCA) Regulation (EU Regulation 2023/1114): This EU-wide regulation aims to harmonize the approach to crypto-asset supervision, enhance consumer protection, and ensure financial stability; Lithuania is actively transposing it into its national legal framework, with certain aspects implemented earlier than mandated by the EU. It will be in full effect on December 30, 2024 (as mentioned by the Bank of Lithuania in December 2023)

Considerations

Income derived from cryptocurrency trading is generally treated as capital gains from the disposal of assets and taxed at a personal income tax rate of 15-20%, depending on the nature and regularity of the trading; a non-taxable threshold exists for capital gains from the sale of personal assets. VAT is generally not applied to the exchange of cryptocurrencies for fiat currencies, as it is considered a financial service. While the Bank of Lithuania previously advised financial institutions to dissociate from virtual currency-related activities, the approach has shifted towards regulation. Enhanced consumer protection is emphasized, requiring platforms to disclose risks and provide clear information on fees.

Notes

Lithuania has been relatively open to the crypto industry, attracting many CASPs. The government's stance is generally open and favorable towards virtual currencies, focusing on creating a transparent and well-regulated environment. The Lithuanian Seimas (Parliament) approved amendments to the Law on the Prevention of Money Laundering and Terrorist Financing on June 8, 2022, tightening regulations for CASPs. New AML requirements for Lithuanian crypto service providers came into force on November 1, 2022, focusing on the client onboarding process. As of January 2025, Lithuanian crypto businesses can register under the MiCA regulation.

Detailed Explanation

Individual citizens and residents in Lithuania are legally permitted to buy, sell, and hold cryptocurrencies. The regulatory environment surrounding this activity has been evolving, with a clear trend towards increased oversight and alignment with the European Union's Markets in Crypto-Assets (MiCA) Regulation (EU Regulation 2023/1114). Historically, Lithuania has been relatively open to the crypto industry, attracting a significant number of crypto-asset service providers (CASPs). However, concerns over money laundering, terrorist financing, and consumer protection have prompted authorities to tighten regulations.

The primary laws governing cryptocurrency activities include the Law on the Prevention of Money Laundering and Terrorist Financing, which has seen several amendments to specifically address CASPs. As of recent developments, Lithuania is actively transposing MiCA into its national legal framework. This EU-wide regulation aims to create a harmonized approach to crypto-asset supervision, enhance consumer protection, and ensure financial stability. According to the Bank of Lithuania (December 2023), "Lithuanian authorities are actively preparing for the MiCA Regulation, which will enter into force on 30 December 2024." The Bank of Lithuania is the primary authority responsible for licensing and supervising CASPs, and, together with the FCIS, will share their supervision in the field of money laundering prevention and terrorist financing.

Key aspects of the regulatory environment include licensing/registration: CASPs, including exchanges and depository wallet operators, are required to register and, under the incoming MiCA framework, will need to be licensed by the Bank of Lithuania. Amendments to national law have progressively introduced stricter requirements for these entities. Strict AML/CFT rules apply to CASPs, including mandatory customer due diligence (CDD), Know Your Customer (KYC) procedures, transaction monitoring, and reporting of suspicious activities to the FCIS. The "Travel Rule," requiring the collection and sharing of originator and beneficiary information for crypto transfers, is also being implemented in line with EU regulations and FATF recommendations.

CASPs are subject to minimum share capital requirements, which have been increased to ensure financial stability. The new regulatory framework, largely driven by MiCA, emphasizes enhanced consumer protection, requiring platforms to disclose risks and provide clear information on fees. Income derived from cryptocurrency trading by individuals is subject to taxation. It is generally treated as capital gains from the disposal of assets and taxed at a personal income tax rate of 15-20%, depending on the nature and regularity of the trading. There's a non-taxable threshold for capital gains from the sale of personal assets. VAT is generally not applied to the exchange of cryptocurrencies for fiat currencies, as it's considered a financial service. While the Bank of Lithuania previously advised financial institutions to dissociate from virtual currency-related activities due to perceived risks, the overall approach has shifted towards regulating the sector rather than outright prohibiting retail participation. The government's stance is generally open and favorable towards virtual currencies, with a focus on creating a transparent and well-regulated environment. Lithuania has implemented new rules regulating the activities of operators working with crypto assets, in accordance with European Union Regulation 2023/1114 on Markets in Crypto-Assets (MiCA), starting from January 1, 2025, companies providing services related to crypto assets must obtain a crypto-asset service provider license issued by the Bank of Lithuania. On June 8, 2022, the Lithuanian Seimas (Parliament) approved amendments to the Law on the Prevention of Money Laundering and Terrorist Financing, tightening regulations for crypto-asset service providers (CASPs).

Summary Points

Retail Trading of Cryptocurrencies in Lithuania: Regulatory Overview (June 2025)

I. General Status:

  • Allowed-Regulated: Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
  • Evolving Regulatory Environment: Trend towards increased oversight and alignment with EU standards (MiCA).

II. Key Regulatory Bodies:

  • Bank of Lithuania:
    • Primary authority for licensing and supervising Crypto-Asset Service Providers (CASPs).
    • Responsible for implementing MiCA regulations.
  • Financial Crime Investigation Service (FCIS):
    • Oversees compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) requirements.
    • Receives reports of suspicious activities from CASPs.

III. Important Legislation and Regulations:

  • Law on the Prevention of Money Laundering and Terrorist Financing:
    • Amended to specifically address CASPs.
    • Imposes strict AML/CFT obligations.
  • Markets in Crypto-Assets (MiCA) Regulation (EU):
    • Being actively transposed into Lithuanian national law.
    • Aims to harmonize crypto-asset supervision across the EU.
    • Enhances consumer protection and ensures financial stability.
  • EU's Sixth AML Directive:
    • Impacts AML/CFT compliance requirements for CASPs.

IV. Requirements for Compliance (CASPs):

  • Licensing/Registration:
    • CASPs (exchanges, depository wallet operators) must register with the Bank of Lithuania.
    • Under MiCA, licensing by the Bank of Lithuania will be required.
  • AML/CFT Obligations:
    • Mandatory Customer Due Diligence (CDD).
    • Know Your Customer (KYC) procedures.
    • Transaction monitoring.
    • Reporting of suspicious activities to the FCIS.
    • Implementation of the "Travel Rule" (collection and sharing of originator/beneficiary information).
  • Capital Requirements:
    • Subject to minimum share capital requirements (increased to ensure financial stability).
  • Consumer Protection:
    • Risk disclosures to consumers.
    • Clear information on fees.

V. Notable Restrictions or Limitations:

  • AML/CFT Compliance: Strict adherence to AML/CFT regulations is crucial.
  • Licensing Requirements: CASPs must obtain and maintain necessary licenses.
  • Taxation: Income from cryptocurrency trading is subject to taxation.

VI. Taxation:

  • Capital Gains:
    • Occasional trading for long-term profit is treated as capital gains.
    • Taxed at a personal income tax rate of 15-20%.
    • Non-taxable threshold for capital gains from the sale of personal assets.
  • Regular Trading:
    • If trading is regular and systematic, it may be considered individual activity.
    • Taxed at a 15% personal income tax rate.
  • VAT:
    • Generally, VAT is not applied to the exchange of cryptocurrencies for fiat currencies (considered a financial service).

VII. Recent Developments or Changes:

  • MiCA Implementation: Lithuania is actively preparing for and implementing MiCA.
  • Tightened AML Regulations: Amendments to the Law on the Prevention of Money Laundering and Terrorist Financing have tightened regulations for CASPs.
  • Bank of Lithuania's Role: The Bank of Lithuania is increasing its oversight of the crypto sector.
  • Early Adoption of MiCA: Lithuania has proactively implemented some MiCA requirements earlier than mandated by the EU.

Full Analysis Report

Report on Retail_Trading_Status in Lithuania

Date: 2025-06-26

Topic: Retail_Trading_Status

Description: Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

Retail_Trading_Status in Lithuania

Identified Status: Allowed-Regulated

Detailed Narrative Explanation:

Individual citizens and residents in Lithuania are legally permitted to buy, sell, and hold cryptocurrencies. The regulatory environment surrounding this activity has been evolving significantly, with a clear trend towards increased oversight and alignment with European Union standards, particularly the Markets in Crypto-Assets (MiCA) Regulation.

Historically, Lithuania has been relatively open to the crypto industry, attracting a significant number of crypto-asset service providers (CASPs). However, concerns over money laundering, terrorist financing, and consumer protection have prompted authorities to tighten regulations. The primary laws governing cryptocurrency activities include the Law on the Prevention of Money Laundering and Terrorist Financing, which has seen several amendments to specifically address CASPs.

As of recent developments, Lithuania is actively transposing MiCA into its national legal framework. This EU-wide regulation aims to create a harmonized approach to crypto-asset supervision, enhance consumer protection, and ensure financial stability. The Bank of Lithuania is the primary authority responsible for licensing and supervising CASPs. The Financial Crime Investigation Service (FCIS) also plays a crucial role in overseeing compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) requirements.

Key aspects of the regulatory environment include:

  • Licensing/Registration: CASPs, including exchanges and depository wallet operators, are required to register and, under the incoming MiCA framework, will need to be licensed by the Bank of Lithuania. Amendments to national law have progressively introduced stricter requirements for these entities.
  • AML/CFT Obligations: Strict AML/CFT rules apply to CASPs. These include mandatory customer due diligence (CDD), Know Your Customer (KYC) procedures, transaction monitoring, and reporting of suspicious activities to the FCIS. The "Travel Rule," requiring the collection and sharing of originator and beneficiary information for crypto transfers, is also being implemented in line with EU regulations and FATF recommendations.
  • Capital Requirements: CASPs are subject to minimum share capital requirements, which have been increased to ensure financial stability.
  • Consumer Protection: The new regulatory framework, largely driven by MiCA, emphasizes enhanced consumer protection, requiring platforms to disclose risks and provide clear information on fees.
  • Taxation: Income derived from cryptocurrency trading by individuals is subject to taxation. It is generally treated as capital gains from the disposal of assets and taxed at a personal income tax rate of 15-20%, depending on the nature and regularity of the trading. There's a non-taxable threshold for capital gains from the sale of personal assets. VAT is generally not applied to the exchange of cryptocurrencies for fiat currencies, as it's considered a financial service.

While the Bank of Lithuania previously advised financial institutions to dissociate from virtual currency-related activities due to perceived risks, the overall approach has shifted towards regulating the sector rather than outright prohibiting retail participation. The government's stance is generally open and favorable towards virtual currencies, with a focus on creating a transparent and well-regulated environment. Lithuanian authorities have been proactive in preparing for MiCA, even opting to implement some of its requirements earlier than mandated by the EU in certain aspects.

Specific, Relevant Text Excerpts:

  • Bank of Lithuania (December 2023): "Lithuanian authorities are actively preparing for the MiCA Regulation, which will enter into force on 30 December 2024... The Bank of Lithuania will be responsible for licensing crypto-asset market participants and, together with the FCIS, will share their supervision in the field of money laundering prevention and terrorist financing."
  • Global Legal Insights (October 2024): "The government's attitude towards virtual currencies is generally open and favourable, with efforts being made to regulate and monitor virtual currency-related activities. Lithuanian law in the area of prevention of money laundering and terrorist financing (AML law) defines virtual currency... Lithuania has taken a proactive approach to regulating virtual currency-related activities... Lithuania does not have any specific legislative provisions on the taxation of cryptocurrencies, so the usual taxation rules apply."
  • Sumsub (October 2024): "Lithuania has emerged as a progressive hub for cryptocurrency innovation, aligning its regulatory framework with the European Union's Markets in Crypto-Assets (MiCA)... On June 8, 2022, the Lithuanian Seimas (Parliament) approved amendments to the Law on the Prevention of Money Laundering and Terrorist Financing, tightening regulations for crypto-asset service providers (CASPs)."
  • Legal Nodes (March 2025): "While Lithuania has a structured legal framework for cryptocurrency, it's still an EU country. While operating in Lithuania, you must comply with local Lithuanian laws and broader EU regulations, such as the MiCA regulation and the sixth AML directive... As of January 2025, Lithuanian crypto businesses can also register under the MICA regulation, a centralized framework that covers the entire EU."
  • NOEWE (April 2025): "The taxation of cryptocurrency income in Lithuania depends on the nature of the activity: If cryptocurrencies are bought and sold occasionally with the aim of long-term profit, the income is treated as capital gains from the disposal of other assets and taxed at a 15–20% personal income tax rate. If trading is carried out regularly and systematically, it may be considered as individual activity, taxed at a 15% personal income tax rate."
  • Eesti Firma (February 2025): "Lithuania has implemented new rules regulating the activities of operators working with crypto assets, in accordance with European Union Regulation 2023/1114 on Markets in Crypto-Assets (MiCA)... Starting from January 1, 2025, companies providing services related to crypto assets must obtain a crypto-asset service provider license issued by the Bank of Lithuania."
  • Ondato (January 2023): "On the 1st of November, 2022, new AML requirements for Lithuanian crypto service providers came into force. Among organizational, reputational and capital requirements that apply to the crypto service providers, these amendments mainly focus on and establish new requirements for the client onboarding process."

Direct, Accessible URL Links to Sources:

  1. Currently unavailable directly through search results, but refers to general knowledge about Lithuania's crypto environment.
  2. Bank of Lithuania: https://www.lb.lt/en/news/lithuanian-authorities-requirements-for-crypto-asset-companies-must-be-tightened-immediately
  3. Global Legal Insights - Blockchain & Cryptocurrency Laws and Regulations 2025 | Lithuania: https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/lithuania
  4. Legal Nodes - How to Get Lithuania Crypto License in 2025: https://legalnodes.com/article/lithuania-crypto-license
  5. Sumsub - Crypto Asset Regulations in Lithuania: New Opportunities with MiCA Compliance: https://sumsub.com/blog/crypto-asset-regulations-in-lithuania-new-opportunities-with-mica-compliance/
  6. Gofaizen & Sherle - Crypto License in Lithuania: https://gofaizen-sherle.com/crypto-license-in-lithuania
  7. CMS Law - CMS Expert Guide to Crypto Regulation in Lithuania: https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/lithuania
  8. NOEWE - Declaring Income from Cryptocurrency Trading in Lithuania: What You Need to Know: https://noewe.eu/en/news/declaring-income-from-cryptocurrency-trading-in-lithuania-what-you-need-to-know/
  9. Eesti Firma - Lithuania Introduces New Rules for Crypto Asset Regulation: https://eestifirma.com/lithuania-introduces-new-rules-for-crypto-asset-regulation
  10. Kryptos.io - Lithuania Crypto Tax Guide 2025: https://kryptos.io/crypto-tax-guide/lithuania
  11. 21 Analytics - Lithuania Crypto Travel Rule: FCIS Requirements | 2025: https://www.21analytics.io/blog/lithuania-crypto-travel-rule-fcis-requirements
  12. Binance Square - EU Cryptocurrency Tax Outline: https://www.binance.com/en/square/post/210940 (Note: While a broad overview, it includes a section on Lithuania consistent with other sources.)
  13. Ondato - New KYC Requirements for the Lithuanian Crypto Industry: https://ondato.com/blog/new-kyc-requirements-for-the-lithuanian-crypto-industry/
  14. Star Legal - Cryptocurrency Taxation in Lithuania. Top 10FAQs Answered: https://starlegal.uk/insights/cryptocurrency-taxation-in-lithuania-top-10faqs-answered/
  15. Freeman Law - Lithuania and Cryptocurrency: https://freemanlaw.com/lithuania-and-cryptocurrency/
  16. Prifinance - Crypto license in Lithuania: https://prifinance.com/en/lithuania/licenses/crypto-license/
  17. Ministry of Finance of the Republic of Lithuania - ICO Guidelines (PDF, older but provides foundational context): https://finmin.lrv.lt/uploads/finmin/documents/files/ICO_Guidelines_Lithuania.pdf
  18. Central Banking - Bank of Lithuania steps up AML/CFT measures for crypto: https://www.centralbanking.com/fintech/crypto-assets/7951096/bank-of-lithuania-steps-up-aml-cft-measures-for-crypto

Web Sources (16)

Sources discovered via web search grounding

Search queries used (6)
  • Retail cryptocurrency trading regulations Lithuania 2025
  • Bank of Lithuania cryptocurrency guidelines
  • Lithuania crypto AML KYC requirements
  • Legal status of cryptocurrency in Lithuania for individuals
  • Taxation of cryptocurrency in Lithuania for retail traders
  • Recent changes to crypto regulation Lithuania
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