Lithuania
Retail_Trading_Status
- Analysis ID
- #714
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- Created
- 2025-12-12 04:44
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- 3d70f7d7...
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Executive Summary
Retail cryptocurrency trading is legal and explicitly regulated in Lithuania under a strict registration regime that is currently transitioning to the EU-wide MiCA framework. As of late 2024, Virtual Asset Service Providers (VASPs) must register with the Centre of Registers and comply with rigorous AML/CFT standards enforced by the Financial Crime Investigation Service (FCIS), including a minimum capital requirement of €125,000. The Bank of Lithuania is assuming a central supervisory role as the country implements MiCA, with a transitional period for existing entities extending into 2025.
Key Pillars
Financial Crime Investigation Service (FCIS): Primary supervisor for AML/CTF compliance and VASP oversight until full MiCA implementation.
Bank of Lithuania: Future primary regulator under MiCA; responsible for prudential supervision and issuing CASP licenses.
Centre of Registers: Maintains the official public list of registered Virtual Asset Service Providers.
State Tax Inspectorate (VMI): Administers tax rules, treating crypto gains as personal income subject to standard rates.
Landmark Laws
Law on the Prevention of Money Laundering and Terrorist Financing (Amended) (Law No. VIII-275 (Amendments effective Nov 1, 2022)) - Enacted: 2022-11-01
- Significantly tightened VASP rules, introducing a €125,000 minimum capital requirement, mandating a local AML officer, and prohibiting anonymous accounts.
- Source
Law on Markets in Crypto-Assets (National Implementation of EU Regulation 2023/1114) - Enacted: 2024-06-01
- Designates the Bank of Lithuania as the competent authority for MiCA and establishes the transition plan for existing VASPs to become licensed Crypto-Asset Service Providers (CASPs).
- Source
Markets in Crypto-Assets Regulation (MiCA) (Regulation (EU) 2023/1114) - Enacted: 2023-05-31
- EU-wide framework fully applicable from Dec 30, 2024, replacing national regimes with a unified licensing system for crypto-asset service providers.
- Source
Considerations
Taxation: Individual crypto gains are taxed at a flat rate of 15% (rising to 20% for high income earners) once they exceed a €2,500 annual allowance.
Strict Capital Requirements: The €125,000 capital requirement introduced in 2022 caused a mass deregistration of shell companies, significantly consolidating the market.
Transitional Period: Existing registered VASPs have a grace period (until mid-2025) to obtain a full MiCA license; those failing to do so must exit the market.
Bank Access: While historically cautious, the Bank of Lithuania now allows traditional financial institutions to provide crypto services if they comply with MiCA notification rules.
Notes
Lithuania is often cited as a 'fintech hub' in Europe, but its approach to crypto has shifted from 'open door' to 'quality over quantity' since 2022. The 2022 amendments were a direct response to the risk of sanctions evasion and money laundering, effectively serving as a 'pre-MiCA' cleanup of the sector.
Remaining Uncertainties
- The exact number of existing VASPs that will successfully transition to full MiCA licensure remains to be seen.
- Specifics of the 'pre-assessment' procedure by the Bank of Lithuania for current registrants versus new applicants.
Detailed Explanation
Detailed Explanation
Retail cryptocurrency trading is legal and explicitly regulated in Lithuania under a strict registration regime that is currently transitioning to the EU-wide Markets in Crypto-Assets (MiCA) framework. The regulatory landscape is defined by a shift from an open-door policy to a stringent 'quality over quantity' approach, primarily initiated by amendments to the Law on the Prevention of Money Laundering and Terrorist Financing effective November 1, 2022. These amendments imposed rigorous Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) standards, including a €125,000 minimum capital requirement for Virtual Asset Service Providers (VASPs), a prohibition on anonymous accounts, and a mandate for a local AML officer. VASPs must register with the Centre of Registers, with the Financial Crime Investigation Service (FCIS) serving as the primary supervisor for AML/CFT compliance during the transitional period. The national implementation of MiCA, enacted on June 1, 2024, designates the Bank of Lithuania as the future primary regulator for prudential supervision and the issuer of Crypto-Asset Service Provider (CASP) licenses. The overarching EU MiCA Regulation (Regulation (EU) 2023/1114), applicable from December 30, 2024, will replace the national regime with a unified EU licensing system. Existing VASPs have a grace period until mid-2025 to obtain a full MiCA license or must exit the market. On taxation, the State Tax Inspectorate treats individual crypto gains as personal income, subject to a standard rate of 15% (rising to 20% for high earners) after a €2,500 annual tax-free allowance. While traditional banks were historically cautious, the Bank of Lithuania now permits them to provide crypto services provided they comply with MiCA notification rules, reflecting the ongoing integration of the sector into the formal financial system.
Summary Points
I. Regulatory Status
- Retail cryptocurrency trading is Allowed-Regulated.
- Operates under a strict national registration regime that is transitioning to the EU-wide MiCA framework.
- The 2022 AML law amendments caused a market consolidation by enforcing strict capital requirements.
II. Key Regulatory Bodies
- Financial Crime Investigation Service (FCIS): Primary supervisor for AML/CFT compliance and VASP oversight until full MiCA implementation.
- Bank of Lithuania: Future primary regulator under MiCA; responsible for prudential supervision and issuing CASP licenses.
- Centre of Registers: Maintains the official public list of registered Virtual Asset Service Providers (VASPs).
- State Tax Inspectorate (VMI): Administers tax rules for cryptocurrency gains.
III. Important Legislation
- Law on the Prevention of Money Laundering and Terrorist Financing (Amended) (Law No. VIII-275), enacted November 1, 2022.
- Significantly tightened VASP rules, introducing a €125,000 minimum capital requirement, mandating a local AML officer, and prohibiting anonymous accounts.
- Law on Markets in Crypto-Assets (National Implementation of EU MiCA), enacted June 1, 2024.
- Designates the Bank of Lithuania as the competent authority and establishes the transition plan for VASPs to become licensed CASPs.
- Markets in Crypto-Assets Regulation (MiCA) (Regulation (EU) 2023/1114), enacted May 31, 2023.
- EU-wide framework fully applicable from December 30, 2024, replacing national regimes with a unified licensing system.
IV. Compliance Requirements
- Registration/Licensing: VASPs must register with the Centre of Registers. A transition to a full MiCA CASP license from the Bank of Lithuania is required by mid-2025.
- Capital: A minimum capital requirement of €125,000 for VASPs (introduced in 2022).
- AML/CFT: Must comply with rigorous standards enforced by the FCIS, including appointing a local AML officer.
- Taxation: Individual crypto gains are taxed as personal income at a flat rate of 15% (20% for high income earners) after exceeding a €2,500 annual tax-free allowance.
V. Notable Restrictions or Limitations
- Anonymous accounts are prohibited for VASPs.
- Existing VASPs that fail to obtain a MiCA license by the end of the transitional period (mid-2025) must exit the market.
- The high capital requirement acts as a significant barrier to entry for shell companies.
VI. Recent Developments or Notes
- Lithuania is implementing MiCA, with a transitional period for existing VASPs extending into 2025.
- The country's approach has shifted from being a 'fintech hub' with an open door to enforcing 'quality over quantity' since the 2022 amendments, which served as a 'pre-MiCA' cleanup of the sector.
- The Bank of Lithuania now allows traditional financial institutions to provide crypto services if they comply with MiCA notification rules, indicating improved bank access for the sector.
Full Analysis Report
Full Analysis Report
Lithuania has established itself as one of the most proactive and strictly regulated jurisdictions for cryptocurrency in the European Union. The regulatory environment is currently defined by a dual framework: the existing national registration regime under the Law on the Prevention of Money Laundering and Terrorist Financing, and the incoming EU-wide Markets in Crypto-Assets (MiCA) regulation. Retail trading is fully permitted, but service providers face high barriers to entry to ensure consumer protection and financial integrity.
In November 2022, Lithuania unilaterally tightened its national regulations ahead of EU standards. The amendments to the AML Law imposed a minimum authorized capital of €125,000 for VASPs, required the appointment of a permanent resident of Lithuania as the AML compliance officer, and strictly banned anonymous accounts. These measures were designed to purge the market of 'shell' crypto companies; consequently, the number of registered VASPs dropped significantly as non-compliant entities were removed from the Centre of Registers' public list.
The Financial Crime Investigation Service (FCIS) currently acts as the primary supervisor for these registered entities, conducting inspections and enforcing AML/CTF compliance. However, the regulatory baton is passing to the Bank of Lithuania as MiCA comes into full force on December 30, 2024. The Bank of Lithuania has issued guidance urging entities that do not intend to seek a full MiCA license to wind down operations and exit the market responsibly.
For retail investors, the environment is stable and transparent. Gains from the sale of cryptocurrencies are treated as personal income. A tax-exempt threshold of €2,500 applies to capital gains from non-employment related assets; gains above this are taxed at 15%, or 20% if the individual's total annual income exceeds specific thresholds (approx. €100,000). Mining income is typically treated as self-employment income subject to different reporting rules.
Lithuania has established itself as one of the most proactive and strictly regulated jurisdictions for cryptocurrency in the European Union. The regulatory environment is currently defined by a dual framework: the existing national registration regime under the Law on the Prevention of Money Laundering and Terrorist Financing, and the incoming EU-wide Markets in Crypto-Assets (MiCA) regulation. Retail trading is fully permitted, but service providers face high barriers to entry to ensure consumer protection and financial integrity. In November 2022, Lithuania unilaterally tightened its national regulations ahead of EU standards. The amendments to the AML Law imposed a minimum authorized capital of €125,000 for VASPs, required the appointment of a permanent resident of Lithuania as the AML compliance officer, and strictly banned anonymous accounts. These measures were designed to purge the market of 'shell' crypto companies; consequently, the number of registered VASPs dropped significantly as non-compliant entities were removed from the Centre of Registers' public list. The Financial Crime Investigation Service (FCIS) currently acts as the primary supervisor for these registered entities, conducting inspections and enforcing AML/CTF compliance. However, the regulatory baton is passing to the Bank of Lithuania as MiCA comes into full force on December 30, 2024. The Bank of Lithuania has issued guidance urging entities that do not intend to seek a full MiCA license to wind down operations and exit the market responsibly. For retail investors, the environment is stable and transparent. Gains from the sale of cryptocurrencies are treated as personal income. A tax-exempt threshold of €2,500 applies to capital gains from non-employment related assets; gains above this are taxed at 15%, or 20% if the individual's total annual income exceeds specific thresholds (approx. €100,000). Mining income is typically treated as self-employment income subject to different reporting rules.
Source Evidence
Primary and secondary sources cited in this analysis
"Financial market participants should not participate in activities or provide services associated with crypto-assets... unless they ensure separation of financial service activities from activities associated with crypto-assets."
"Participants of the crypto-asset services market that do not plan to continue their operations should not delay and must launch active communication campaigns to ensure that all of their clients are properly and timely informed."
"The amendments... establish a minimum authorised capital of EUR 125,000... and strengthen the requirements for the managers of such companies."
"As of January 2025, Lithuanian crypto businesses can also register under the MiCA regulation... The MICA license applies to these types of CASPs."
"Krepsta said that 580 firms are currently active in Lithuania, and it is unlikely that most will be able to obtain the new license successfully."
Web Sources (5)
Sources discovered via web search grounding
Search queries used (5)
- Lithuania crypto tax rules for individuals 2024
- Lithuania Law on Prevention of Money Laundering and Terrorist Financing crypto amendments
- Bank of Lithuania position on cryptocurrency retail trading
- Financial Crime Investigation Service Lithuania crypto VASP list
- Lithuania cryptocurrency regulation retail trading status 2024 2025
https://www.faicomply.com/vasp-licensing-lithuania
https://kryptos.io/guides/lithuania-crypto-tax-guide
https://blog.mexc.com/wiki/are-there-any-taxes-for-crypto-in-lithuania/
https://tet.lt/blog/taxation-of-private-persons-crypto-earnings-in-lithuania/
https://gofaizen-sherle.com/crypto-license/lithuania