Latvia
Retail_Trading_Status
- Analysis ID
- #708
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- Latest
- Created
- 2025-12-12 04:43
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- 4f410aeb...
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Executive Summary
Cryptocurrency activities in Latvia are fully legal and regulated under the EU's Markets in Crypto-Assets (MiCA) framework, which was integrated into national law via the Law on Crypto-asset Services in 2024. Latvijas Banka (the Central Bank) serves as the primary regulator and has actively issued licenses to Crypto-Asset Service Providers (CASPs) as of December 2025. Retail trading is permitted, with clear tax guidelines imposing a 20% capital gains tax on profits.
Key Pillars
Primary Regulator: Latvijas Banka (Central Bank of Latvia) handles CASP licensing and prudential supervision.
AML/CFT Compliance: Enforced by the Financial Intelligence Unit (FIU) and Latvijas Banka under MiCA and national AML laws.
Licensing Regime: Mandatory CASP authorization for all service providers; transition period active until June 2025 for pre-existing entities.
Taxation: State Revenue Service (SRS) administers a 20% capital gains tax on crypto-to-fiat conversions for individuals.
Landmark Laws
Law on Crypto-asset Services (Crypto-Asset Services Law) - Enacted: 2024-07-13
- The primary national legislation implementing the EU MiCA regulation. It designates Latvijas Banka as the competent authority, establishes licensing fees, and sets supervision standards.
- Source
Regulation (EU) 2023/1114 (MiCA) (EU 2023/1114) - Enacted: 2023-05-31
- EU-wide regulation establishing a harmonized framework for crypto-assets, replacing local VASP regimes with a passportable CASP license.
- Source
Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (AML/CFT Law) - Enacted: 2019-06-13
- Defines virtual currency service providers as subject entities requiring AML/KYC compliance (amended to align with MiCA definitions).
- Source
Considerations
Taxation: Capital gains from crypto are taxed at 20% (Personal Income Tax). Crypto-to-crypto trades are generally not taxable events until converted to fiat.
Transition Period: Entities operating before Dec 30, 2024, may continue under the old AML registration regime until June 30, 2025, if they applied for a CASP license.
Share Capital: As of late 2024, Latvian companies can legally use crypto-assets to pay for share capital.
VAT: Exchange services (fiat-to-crypto) are exempt from VAT.
Notes
The analysis reflects the regulatory state as of December 12, 2025. Latvia is positioning itself as an early adopter and 'friendly' jurisdiction for MiCA compliance to attract fintech business.
Remaining Uncertainties
- The exact number of legacy VASPs that will successfully transition to full CASP status by the June 2025 deadline is unknown.
- Specific enforcement actions under the new MiCA regime are yet to be seen as the licenses were issued very recently (Dec 2025).
Detailed Explanation
Detailed Explanation
Cryptocurrency activities in Latvia are fully legal and regulated. The regulatory framework is anchored in the European Union's Markets in Crypto-Assets (MiCA) regulation, which was integrated into Latvian national law through the Law on Crypto-asset Services, enacted on July 13, 2024. This law designates Latvijas Banka, the Central Bank of Latvia, as the primary regulator responsible for licensing and prudential supervision of Crypto-Asset Service Providers (CASPs). The country is positioning itself as an early adopter and friendly jurisdiction for MiCA compliance to attract fintech business, with a transition period allowing entities operating before December 30, 2024, to continue under the old Anti-Money Laundering registration regime until June 30, 2025, provided they have applied for a CASP license. The Financial Intelligence Unit (FIU) and Latvijas Banka enforce Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) compliance under the national Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing, enacted on June 13, 2019, which has been amended to align with MiCA definitions. For taxation, the State Revenue Service (SRS) administers a 20% capital gains tax on profits from crypto-to-fiat conversions for individuals, while crypto-to-crypto trades are generally not taxable events until conversion to fiat. Notably, as of late 2024, Latvian companies can legally use crypto-assets to pay for share capital, and exchange services involving fiat-to-crypto conversions are exempt from Value Added Tax (VAT).
Summary Points
I. Regulatory Status
* Cryptocurrency activities are Allowed-Regulated.
* Fully legal and regulated under the EU MiCA framework.
* Retail trading is permitted.
II. Key Regulatory Bodies
* Latvijas Banka (Central Bank of Latvia): Primary regulator for CASP licensing and prudential supervision.
* Financial Intelligence Unit (FIU): Enforces AML/CFT compliance alongside Latvijas Banka.
* State Revenue Service (SRS): Administers taxation on crypto capital gains.
III. Important Legislation
* Law on Crypto-asset Services (Crypto-Asset Services Law): Enacted 2024-07-13. The primary national legislation implementing EU MiCA, designating Latvijas Banka as the competent authority and establishing licensing fees and supervision standards.
* Regulation (EU) 2023/1114 (MiCA): Enacted 2023-05-31. The EU-wide harmonized framework for crypto-assets, replacing local VASP regimes with a passportable CASP license.
* Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (AML/CFT Law): Enacted 2019-06-13. Defines virtual currency service providers as subject entities requiring AML/KYC compliance, amended to align with MiCA definitions.
IV. Compliance Requirements
* Licensing: Mandatory CASP authorization from Latvijas Banka for all service providers.
* AML/CFT: Compliance enforced by the FIU and Latvijas Banka under the national AML/CFT Law and MiCA.
* Taxation: Individuals must pay a 20% capital gains tax on profits from crypto-to-fiat conversions, administered by the SRS.
V. Notable Restrictions or Limitations
* No specific restrictions mentioned beyond standard regulatory compliance.
VI. Recent Developments or Notes
* Transition Period: Entities operating before December 30, 2024, may continue under the old AML registration regime until June 30, 2025, if they applied for a CASP license.
* Share Capital: As of late 2024, Latvian companies can legally use crypto-assets to pay for share capital.
* VAT: Exchange services (fiat-to-crypto) are exempt from VAT.
* The analysis reflects the regulatory state as of December 12, 2025.
* Latvia is positioning itself as an early adopter and 'friendly' jurisdiction for MiCA compliance to attract fintech business.
Full Analysis Report
Full Analysis Report
Latvia has successfully transitioned from a basic AML-registration regime to a comprehensive regulatory environment under the European Union's Markets in Crypto-Assets (MiCA) regulation. As of December 12, 2025, the country is in the full implementation phase. The national 'Law on Crypto-asset Services', adopted in July 2024, designated Latvijas Banka (the Central Bank) as the sole competent authority for licensing and supervision, replacing the fragmented oversight previously shared with the State Revenue Service (SRS). This move has centralized control and elevated the standards for market participants.
The licensing regime is active and operational. In early December 2025, Latvijas Banka issued its first CASP licenses under the new MiCA framework to entities such as 'BlockBen' and 'Nexdesk'. These licenses allow the firms to passport their services across the entire European Union, positioning Latvia as a competitive fintech hub. The rigorous authorization process requires applicants to demonstrate robust governance, IT security, and AML/CFT control mechanisms, ensuring a high level of consumer protection.
For retail investors, the environment is stable and clearly defined. Trading, holding, and transferring cryptocurrencies are legal activities. The tax treatment is explicitly codified: individuals are subject to a 20% Personal Income Tax on capital gains derived from the sale of crypto assets. The taxable event is triggered upon conversion to fiat currency or purchase of goods/services, while crypto-to-crypto exchanges typically remain tax-neutral. Furthermore, recent amendments to the Commercial Law allow entrepreneurs to contribute crypto-assets as share capital for establishing limited liability companies, further integrating digital assets into the formal economy.
A transition period remains in effect for legacy operators. Companies that were registered as Virtual Asset Service Providers (VASPs) with the SRS prior to December 30, 2024, are permitted to continue operations until June 30, 2025. To extend operations beyond this date, they must have submitted a full CASP license application to Latvijas Banka. This grandfathering clause ensures market continuity while pushing all actors toward the higher compliance standards of MiCA.
Latvia has successfully transitioned from a basic AML-registration regime to a comprehensive regulatory environment under the European Union's Markets in Crypto-Assets (MiCA) regulation. As of December 12, 2025, the country is in the full implementation phase. The national 'Law on Crypto-asset Services', adopted in July 2024, designated Latvijas Banka (the Central Bank) as the sole competent authority for licensing and supervision, replacing the fragmented oversight previously shared with the State Revenue Service (SRS). This move has centralized control and elevated the standards for market participants. The licensing regime is active and operational. In early December 2025, Latvijas Banka issued its first CASP licenses under the new MiCA framework to entities such as 'BlockBen' and 'Nexdesk'. These licenses allow the firms to passport their services across the entire European Union, positioning Latvia as a competitive fintech hub. The rigorous authorization process requires applicants to demonstrate robust governance, IT security, and AML/CFT control mechanisms, ensuring a high level of consumer protection. For retail investors, the environment is stable and clearly defined. Trading, holding, and transferring cryptocurrencies are legal activities. The tax treatment is explicitly codified: individuals are subject to a 20% Personal Income Tax on capital gains derived from the sale of crypto assets. The taxable event is triggered upon conversion to fiat currency or purchase of goods/services, while crypto-to-crypto exchanges typically remain tax-neutral. Furthermore, recent amendments to the Commercial Law allow entrepreneurs to contribute crypto-assets as share capital for establishing limited liability companies, further integrating digital assets into the formal economy. A transition period remains in effect for legacy operators. Companies that were registered as Virtual Asset Service Providers (VASPs) with the SRS prior to December 30, 2024, are permitted to continue operations until June 30, 2025. To extend operations beyond this date, they must have submitted a full CASP license application to Latvijas Banka. This grandfathering clause ensures market continuity while pushing all actors toward the higher compliance standards of MiCA.
Source Evidence
Primary and secondary sources cited in this analysis
"A legal person... authorized to provide crypto-asset services by Latvijas Banka in line with Regulation (EU) 2023/1114, is entitled to provide crypto-asset services."
"Latvia has issued its first licences under the EU's Markets in Crypto-Assets Regulation (MiCA)... officials announced that BlockBen and Nexdesk are the first companies authorised by Bank of Latvia."
"The purpose of this Law is to ensure the application of Regulation (EU) 2023/1114... designating Latvijas Banka as the competent authority."
"On 10th December, the Supervisory Committee of Latvijas Banka... issued a license to a company called 'Nexdesk'."
"Crypto assets are considered capital assets, and income from their sale is subject to the Capital Gains Tax rate of 20%."
Web Sources (11)
Sources discovered via web search grounding
Search queries used (5)
- Latvia cryptocurrency regulation status 2025
- Latvia Financial and Capital Market Commission crypto regulation
- Latvia crypto tax retail investors 2025
- Latvia Law on Crypto-asset Services MiCA implementation
- Latvijas Banka crypto asset service provider register
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https://fintechlatvia.eu/crypto-asset/mica-regulation/
https://www.baltictimes.com/latvia_launches_mica_era_with_first_eu-level_crypto-asset_licences___positions_itself_as_gateway_to_the_eu_fintech_market/
https://blog.mexc.com/wiki/are-there-any-taxes-for-crypto-in-latvia/
https://innovator.lv/crypto-assets-and-taxes-in-latvia-key-points-in-one-place/?lang=en
https://www.tetraconsultants.com/jurisdictions/register-company-in-latvia/latvia-cryptocurrency-license/
https://blog.mexc.com/wiki/is-crypto-legal-in-latvia/
https://incfine.com/en/how-to-get-a-crypto-license-in-latvia-and-build-real-access-to-the-eu-crypto-scene/