Back to Analyses

Liechtenstein

Retail_Trading_Status

Allowed-Regulated Unknown
Edit
Analysis ID
#502
Version
Latest
Created
2025-06-26 13:18
Workflow Stage
Live

Executive Summary

Liechtenstein permits retail cryptocurrency trading under a comprehensive regulatory framework primarily governed by the Token and TT Service Provider Act (TVTG), also known as the Blockchain Act, which came into force on January 1, 2020. The Financial Market Authority (FMA) is the primary regulator, emphasizing investor protection, market integrity, and anti-financial crime measures. TT Service Providers, like exchanges and custodians, must register with the FMA and adhere to KYC/AML obligations under the Due Diligence Act (DDA) and Due Diligence Ordinance (DDO). Liechtenstein also anticipates implementing the EU's Markets in Crypto-Assets Regulation (MiCA) around February 1, 2025, which will work alongside or replace some provisions of the TVTG.

Key Pillars

The key regulatory pillars include: (1) The Financial Market Authority (FMA) as the primary regulator overseeing cryptocurrency services. (2) Core compliance requirements, including Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations under the Due Diligence Act (DDA) and Due Diligence Ordinance (DDO). The 'travel rule' is also implemented. (3) Licensing and registration requirements for TT Service Providers (crypto exchanges, custodians, token issuers) with the FMA, which involves meeting specific legal requirements like adequate internal control mechanisms and, in some cases, minimum capital.

Landmark Laws

  • Token and TT Service Provider Act (TVTG) / Blockchain Act: Effective January 1, 2020. Provides a legal structure for the token economy, including cryptocurrencies, establishing a civil law basis for cryptoasset ownership and disposition.
  • Due Diligence Act (DDA) and Due Diligence Ordinance (DDO): Imposes comprehensive KYC/AML obligations on TT Service Providers, including customer verification and transaction monitoring.
  • Markets in Crypto-Assets Regulation (MiCA): Expected to become effective around February 1, 2025. It will work in parallel with, or replace in some areas, provisions of the TVTG.

Considerations

  • Legal Classification: Tokens are defined as information on a Trustworthy Technology (TT) system representing rights assigned to TT identifiers. Cryptocurrencies are not expressly prohibited, and their use for transactions and exchanges with fiat currencies is permitted.
  • Taxation: For natural persons, cryptocurrency holdings must be declared for wealth tax purposes. Speculative profits from trading cryptocurrencies by private individuals are generally considered tax-free capital gains. For legal entities, profits are subject to corporate income tax. The tax authorities publish exchange rates for common cryptocurrencies.
  • Risks and Concerns: The regulatory framework focuses on preventing money laundering and financial crime, ensuring investor protection, and maintaining market integrity.

Notes

  • Liechtenstein recognized the potential of blockchain technology early and proactively established a regulatory framework with the TVTG.
  • The government and FMA have adopted a progressive approach, creating specific departments to support innovation in the financial market and fintech sectors.
  • Individuals are not typically subject to licensing for buying, selling, or holding cryptocurrencies for their own account but interact with regulated entities that adhere to strict KYC/AML and consumer protection rules.
  • The government accepts Bitcoin and Ethereum for certain services, and cryptocurrencies can be used for initial capital contribution for forming legal entities. Retail adoption is growing, with examples like SPAR grocery stores accepting Bitcoin Lightning payments.

Detailed Explanation

Liechtenstein permits individual citizens and residents to buy, sell, and hold cryptocurrencies within a regulated environment. The primary legislation governing this activity is the Token and TT Service Provider Act (TVTG), also known as the Blockchain Act, which came into force on January 1, 2020. This act provides a comprehensive legal structure for the token economy, including cryptocurrencies, and establishes a civil law basis for the ownership, possession, and disposition of cryptoassets. The Financial Market Authority (FMA) is the main regulatory body responsible for supervising entities involved in cryptocurrency services.

Cryptocurrencies are not expressly prohibited in Liechtenstein, and their use for transactions and exchanges with fiat currencies is permitted. Service providers dealing with cryptocurrencies on a commercial basis, known as TT Service Providers, are generally required to register with the FMA. This includes entities such as crypto exchanges, custodians, and token issuers. Registration involves meeting specific legal requirements, including having adequate internal control mechanisms and, in some cases, minimum capital. The FMA publishes information on TT service providers on its website.

Liechtenstein places a significant emphasis on preventing money laundering and financial crime. TT Service Providers are subject to comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations under the Due Diligence Act (DDA) and Due Diligence Ordinance (DDO). This means that crypto exchanges and other regulated entities must implement procedures to verify the identity of their customers and monitor transactions. The 'travel rule,' which requires the collection and exchange of information on the originator and beneficiary of virtual asset transfers, is also implemented.

Consumer protection is a primary objective of the TVTG, achieved through the registration requirements for service providers and reporting and publication obligations. For taxation, natural persons resident in Liechtenstein must declare their holdings of cryptocurrencies for wealth tax purposes. Speculative profits from trading cryptocurrencies by private individuals are generally considered tax-free capital gains. For legal entities, profits from trading cryptocurrencies are typically subject to corporate income tax. The tax authorities publish exchange rates for common cryptocurrencies.

As a member of the European Economic Area (EEA), Liechtenstein is expected to implement the EU's Markets in Crypto-Assets Regulation (MiCA) around February 1, 2025. MiCA will work in parallel with or, in some areas, replace provisions of the TVTG. The FMA has been actively preparing for MiCA implementation, holding discussions with potential crypto-asset service providers (CASPs) seeking authorization under the new EU regime. Liechtenstein recognized the potential of blockchain technology early and proactively established a comprehensive regulatory framework with the TVTG, positioning the country as a leading jurisdiction for crypto and blockchain-based businesses. The government and the FMA have adopted a progressive and open approach, creating specific departments to support innovation in the financial market and fintech sectors.

While retail trading is allowed and regulated, the regulations primarily target service providers to ensure a safe and transparent environment for individuals. Individuals themselves are not typically subject to licensing for merely buying, selling, or holding cryptocurrencies for their own account but will interact with regulated entities that must adhere to strict KYC/AML and other consumer protection rules. The framework is designed to be technology-neutral, accommodating various types of tokens and blockchain-based services. The government accepts Bitcoin and Ethereum for certain services, and cryptocurrencies can be used for the initial capital contribution for forming legal entities. Retail adoption is also growing, with examples like SPAR grocery stores accepting Bitcoin Lightning payments. In summary, individual citizens and residents in Liechtenstein are legally permitted to engage in cryptocurrency trading, and this activity occurs within a well-defined and robust regulatory environment.

Summary Points

## Retail Trading of Cryptocurrencies in Liechtenstein: Regulatory Overview (2025-06-26)

**I. Overall Regulatory Status:**

*   **Allowed and Regulated:** Individual citizens and residents are legally permitted to buy, sell, and hold cryptocurrencies.
*   **Crypto-Friendly Stance:** Liechtenstein aims to foster innovation while ensuring investor protection and combating financial crime.

**II. Key Regulatory Bodies:**

*   **Financial Market Authority (FMA):**
    *   Primary regulatory body supervising entities involved in cryptocurrency services.
    *   Responsible for registering TT Service Providers.
    *   Actively preparing for MiCA implementation.

**III. Important Legislation and Regulations:**

*   **Token and TT Service Provider Act (TVTG) / Blockchain Act (Effective January 1, 2020):**
    *   Provides a comprehensive legal structure for the token economy, including cryptocurrencies.
    *   Defines tokens as information on a Trustworthy Technology (TT) system.
    *   Establishes a civil law basis for ownership, possession, and disposition of cryptoassets.
*   **Due Diligence Act (DDA) and Due Diligence Ordinance (DDO):**
    *   Impose Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations on TT Service Providers.
*   **Markets in Crypto-Assets Regulation (MiCA):**
    *   EU regulation expected to be implemented in Liechtenstein around February 1, 2025.
    *   Will work in parallel with or replace some provisions of the TVTG.

**IV. Requirements for Compliance (TT Service Providers):**

*   **Registration with the FMA:** Required for entities dealing with cryptocurrencies on a commercial basis (TT Service Providers).
    *   Includes crypto exchanges, custodians, and token issuers.
*   **Legal Requirements for Registration:**
    *   Adequate internal control mechanisms.
    *   Minimum capital (in some cases).
    *   Technical suitability.
*   **KYC/AML Obligations:**
    *   Implement procedures to verify customer identity.
    *   Monitor transactions.
    *   Comply with the "travel rule" (collection and exchange of information on originator and beneficiary of virtual asset transfers).
*   **Consumer Protection:**
    *   Adherence to minimum standards established through registration requirements.
    *   Compliance with reporting and publication obligations.

**V. Notable Restrictions or Limitations:**

*   **Focus on Service Providers:** Regulations primarily target service providers to ensure a safe and transparent environment.
*   **Individual Users:** Individuals are not typically subject to licensing for merely buying, selling, or holding cryptocurrencies for their own account.
*   **Interaction with Regulated Entities:** Individuals interact with regulated entities that must adhere to strict KYC/AML and other consumer protection rules.

**VI. Taxation:**

*   **Natural Persons (Residents):**
    *   Holdings of cryptocurrencies must be declared for wealth tax purposes.
    *   Speculative profits from trading cryptocurrencies are generally tax-free capital gains.
*   **Legal Entities:**
    *   Profits from trading cryptocurrencies are typically subject to corporate income tax.
*   **Tax Authority Guidance:**
    *   Tax authorities publish exchange rates for common cryptocurrencies for tax purposes.

**VII. Recent Developments and Changes:**

*   **MiCA Implementation:** Active preparation by the FMA for the implementation of the EU's Markets in Crypto-Assets Regulation (MiCA).
*   **Government Acceptance:** The government accepts Bitcoin and Ethereum for certain services.
*   **Growing Retail Adoption:** Examples include SPAR grocery stores accepting Bitcoin Lightning payments.
*   **Capital Contribution:** Cryptocurrencies can be used for the initial capital contribution for forming legal entities.

Full Analysis Report

Retail_Trading_Status: Liechtenstein

Report 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).

1. Current Status

Allowed-Regulated

2. Detailed Narrative Explanation

Liechtenstein permits individual citizens and residents to buy, sell, and hold cryptocurrencies. This activity is subject to a comprehensive and specific regulatory framework, primarily established by the Token and TT Service Provider Act (TVTG), also known as the Blockchain Act, which came into force on January 1, 2020. This pioneering legislation provides a clear legal structure for the entire token economy, including cryptocurrencies.

The regulatory environment in Liechtenstein is characterized by its "crypto-friendly" stance, aiming to foster innovation while ensuring investor protection, market integrity, and combating financial crime. The Financial Market Authority (FMA) is the primary regulatory body responsible for supervising entities involved in cryptocurrency services.

Key Regulatory Aspects:

  • Legal Framework for Cryptocurrencies: The TVTG defines tokens as information on a Trustworthy Technology (TT) system representing rights assigned to TT identifiers. It establishes a civil law basis for the ownership, possession, and disposition of cryptoassets. Cryptocurrencies are not expressly prohibited, and their use for transactions and exchanges with fiat currencies is permitted.
  • Licensing and Registration: Service providers dealing with cryptocurrencies on a commercial basis, known as TT Service Providers, are generally required to register with the FMA. This includes entities such as crypto exchanges, custodians, and token issuers. The registration process involves meeting specific legal requirements, including having adequate internal control mechanisms, and in some cases, minimum capital.
  • KYC/AML Requirements: Liechtenstein places significant emphasis on preventing money laundering and financial crime. TT Service Providers are subject to comprehensive Know Your Customer (KYC) and Anti-Money Laundering (AML) obligations under the Due Diligence Act (DDA) and Due Diligence Ordinance (DDO). This means that crypto exchanges and other regulated entities must implement procedures to verify the identity of their customers and monitor transactions. The "travel rule," which requires the collection and exchange of information on the originator and beneficiary of virtual asset transfers, is also implemented.
  • Consumer Protection: A primary objective of the TVTG is to protect users of TT services. This is achieved through the registration requirements for service providers, which establish minimum standards, as well as through reporting and publication obligations.
  • Taxation: Liechtenstein has established clear tax guidance for cryptocurrencies. For natural persons resident in Liechtenstein, holdings of cryptocurrencies must be declared for wealth tax purposes. However, speculative profits from trading cryptocurrencies by private individuals are generally considered tax-free capital gains. For legal entities, profits from trading cryptocurrencies are typically subject to corporate income tax. The tax authorities publish exchange rates for common cryptocurrencies for tax purposes.
  • Integration with EU Law (MiCA): As a member of the European Economic Area (EEA), Liechtenstein is expected to implement the EU's Markets in Crypto-Assets Regulation (MiCA). MiCA is anticipated to become effective in Liechtenstein around February 1, 2025, and will work in parallel with or, in some areas, replace provisions of the TVTG. The FMA has been actively preparing for MiCA implementation, including holding discussions with potential crypto-asset service providers (CASPs) seeking authorization under the new EU regime.

Historical Context and Nuance:

Liechtenstein recognized the potential of blockchain technology early on and proactively established a comprehensive regulatory framework with the TVTG. This has positioned the country as a leading jurisdiction for crypto and blockchain-based businesses. The government and the FMA have adopted a progressive and open approach, creating specific departments to support innovation in the financial market and fintech sectors.

While retail trading is allowed and regulated, the regulations primarily target the service providers to ensure a safe and transparent environment for individuals. Individuals themselves are not typically subject to licensing for merely buying, selling, or holding cryptocurrencies for their own account, but they will interact with regulated entities that must adhere to strict KYC/AML and other consumer protection rules. The framework is designed to be technology-neutral, accommodating various types of tokens and blockchain-based services.

The acceptance of cryptocurrencies extends to some official uses; for instance, the government accepts Bitcoin and Ethereum for certain services, and cryptocurrencies can be used for the initial capital contribution for forming legal entities. Retail adoption is also growing, with examples like SPAR grocery stores accepting Bitcoin Lightning payments.

In summary, individual citizens and residents in Liechtenstein are legally permitted to engage in cryptocurrency trading, and this activity occurs within a well-defined and robust regulatory environment designed to protect participants and maintain financial integrity.

3. Specific, Relevant Text Excerpts

  • Global Legal Insights (2024-10-25): "Cryptocurrencies are not expressly prohibited under Liechtenstein law and it does not provide restrictions on owning and using cryptocurrencies for transactions. Also, exchange between fiat currencies and cryptocurrencies is permitted."
  • Global Legal Insights (2024-10-25): "Liechtenstein is widely recognised as a very crypto-friendly jurisdiction, and the Government was quick to acknowledge the potential advantages of blockchain technology and distributed ledger technology (“DLT”). Understanding the need for a regulatory framework, the Government established a workgroup in early 2018 tasked with creating a sustainable legal structure for blockchain technology. By the beginning of 2019, proposals for the Blockchain Act were being discussed, and by fall 2019, the law was passed and came into force in January 2020."
  • Global Legal Insights (2024-10-25): "Most CASPs (Custodians, Exchange Service Providers and Trading Platforms Operators) are subject to due diligence obligations under Liechtenstein law and must provide a KYC and AML procedure."
  • FMA Liechtenstein (TT service providers page): "Persons with a registered office or residence in Liechtenstein who wish to provide TT services in Liechtenstein on a professional basis in principle require registration with the FMA. Registration in the TT Service Provider Register depends on minimum legal requirements (e.g. technical suitability, internal control mechanisms, minimum capital where applicable) which are important for client protection."
  • NÄGELE Rechtsanwälte GmbH (Taxation in Liechtenstein, 2024-01-25): "With regard to the tax treatment of cryptocurrencies, this means that every natural person with unlimited tax liability must declare the holdings of cryptocurrencies at the beginning of the respective tax year and convert them into Swiss francs. At the same time, speculative profits from trading in cryptocurrencies are tax-free and do not have to be declared."
  • CMS Expert Guide to Crypto Regulation in Liechtenstein: "Generally, VT service providers and agents that are subject to registration under the TVTG are subject to AML requirements under the Liechtenstein Due Diligence Act (Sorgfaltspflichtgesetz, DDA)."
  • Cointelegraph (An overview of the Liechtenstein Blockchain Act, 2023-09-28): "If you wonder if cryptocurrency is legal in Liechtenstein, the answer is yes. One can own and transact using cryptocurrencies in Liechtenstein. The FMA oversees participants in the financial markets, including those involved in the cryptocurrency industry, and establishes the framework for legal and regulatory purposes."
  • Notabene (Travel Rule Crypto in Liechtenstein by the FMA): "Yes, owning and using cryptocurrency for transactions is legal in Liechtenstein. In fact, Liechtenstein Blockchain Act (TVTG) provides a comprehensive framework on the nature of crypto assets and related services."

4. Direct, Accessible URL Links to Sources

  1. Global Legal Insights - Blockchain & Cryptocurrency Laws and Regulations 2025 | Liechtenstein: https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-regulations/liechtenstein (Specific page referenced in excerpts)
  2. CMS Expert Guide to Crypto Regulation in Liechtenstein: https://cms.law/en/int/expert-guides/cms-expert-guide-to-crypto-regulation/liechtenstein
  3. Crypto Regulation in Liechtenstein 2025 (Regulated United Europe): https://ru.auex.eu/crypto-regulyaciya-v-lixtenshtejne/ (Note: Original source likely in another language, link provided is to the English version if available, or the direct link found. The content cited is generally available across multiple similar legal/consultancy firm summaries.)
  4. Crypto regulation in Liechtenstein – state of play (Matczuk, Suchta, Dylak & Partners): https://msd.group/crypto-regulation-in-liechtenstein-state-of-play/
  5. Token and TT Service Provider Act (TVTG) - Unofficial English Translation (Landesrecht Liechtenstein): https://www.gesetze.li/konso/pdf/2019301000?version=7 (or similar official portal for Liechtenstein laws if a direct link to an English PDF is available, the provided link is an example of how such laws are published)
  6. FMA Liechtenstein - TT service providers: https://www.fma-li.li/en/specialised-topics/tt-service-providers.html
  7. Impuls Liechtenstein - Blockchain: https://www.liechtenstein-business.li/en/key-sectors/blockchain
  8. NÄGELE Rechtsanwälte GmbH - Taxation in Liechtenstein: https://www.naegele.law/expertise/tax-law/taxation-in-liechtenstein/ (The specific article on crypto taxation might be a sub-page or blog post on their site)
  9. Freeman Law - Liechtenstein and Cryptocurrency: https://freemanlaw.com/liechtenstein-cryptocurrency-laws/
  10. Legal 500 - Liechtenstein: Blockchain Country Comparative Guides: https://www.legal500.com/guides/chapter/liechtenstein-blockchain/
  11. Crypto Research Report - Tax Implications of Digital Assets in Switzerland and Liechtenstein: https://cryptoresearch.report/crypto-research/tax-implications-of-digital-assets-in-switzerland-and-liechtenstein/
  12. Cointelegraph - An overview of the Liechtenstein Blockchain Act: https://cointelegraph.com/learn/an-overview-of-the-liechtenstein-blockchain-act
  13. Notabene - Travel Rule Crypto in Liechtenstein by the FMA: https://notabene.id/crypto-travel-rule-liechtenstein
  14. Liechtenstein Finance - Liechtenstein has the clearest crypto tax regulations: https://www.liechtenstein-finance.li/en/news/liechtenstein-has-the-clearest-crypto-tax-regulations
  15. AInvest - SPAR Expands Bitcoin Lightning Payments to Liechtenstein: https://ainvest.com/news/spar-expands-bitcoin-lightning-payments-to-liechtenstein-01hyz9z0k7knx1k341wgg0zsgx/
  16. UEEx Technology - Best Crypto Exchange in Liechtenstein (2025): https://ueex.com/best-crypto-exchange-in-liechtenstein/

Web Sources (17)

Sources discovered via web search grounding

Search queries used (6)
  • Liechtenstein retail cryptocurrency trading status 2025
  • Liechtenstein cryptocurrency regulation FMA
  • Token and VT Service Provider Act Liechtenstein
  • KYC/AML cryptocurrency Liechtenstein
  • Are individuals allowed to trade crypto in Liechtenstein?
  • Liechtenstein crypto tax rules for individuals
Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Source

Reviews

No reviews yet

Submit Review

Challenge: Disagree with the analysis | Approval: Confirm it's correct | Refinement: Suggest improvements