Lithuania is planning to introduce tougher rules for cryptocurrency companies. The Lithuanian government is working on making changes that according to authorities will exceed the prerequisites of the most recent EU Anti-Money Laundering Directive.

Lithuania, which grew to become a crowdfunding hotspot, plans to put into action legal adjustments that are very likely to place a burden on companies within the cryptocurrency and fintech sectors by requiring that they meet additional obligations. The changes are part of the initiatives of Lithuanian regulators to increase control over digital currencies and enhance oversight of the overall economy created around them.

According to the latest rules, only organizations listed with the country’s Center of Registers will be permitted to operate with digital currencies in Lithuania. These businesses will be required to adopt extensive KYC (Know Your Customer) and anti-money laundering processes. In accordance with the draft, the actions will have to be put into place upon establishing a connection with a client or customer for the first time. Those who provide services will be required to notify the Financial Crime Investigation Service (FCIS) of any large fund transfers.

The new requirements will deal with not only procedures involving fiat money but additionally cryptocurrency-to-cryptocurrency financial transactions. Companies that behave as intermediaries in these exchanges will be liable for guaranteeing compliance with the country’s Law on the Prevention of Money Laundering and Terrorist Financing. What this means is that they will be expected to verify the identification of their clients prior to supplying any services.

Sigitas Mitkus, head of the Finance Ministry’s Financial Market Policy Department, recently discussed the government’s objectives. Speaking to BNS news, Mitkus made it clear that the plan is to create a transparent environment for cryptocurrency exchanges, depository wallet operators and ICO initiators, while also working to improve consumer protections. Mitkus also stressed that by launching certain restrictions for financial operations, authorities are going above and beyond the EU Anti-Money Laundering Directive.

Not only will Lithuanian businesses be impacted by the new legislation, but so too will their clients. If the law is completely applied as drafted, local residents will not have the ability to reap the benefits of the cryptocurrency services offered by businesses based outside of Lithuania, as it declares that only organizations registered within Lithuania will be permitted to provide services to Lithuanian clients.

Estonia, another country which boasts a thriving cryptocurrency industry due in part to favorable regulations, recently declared its own intention to tighten up the licensing process for businesses with digital assets. One of the regulations under consideration expresses that foreign entities registered in Estonia will have to abide by with the demand to keep an open office location there.

Companies such as Spectrocoin have already established an Estonian location and secured a license so as to legally provide services to clients outside of Lithuania. Additionally, the company is also exploring options for operating from other jurisdictions. Bankera, Spectrocoin’s head company, was among the platforms that profited substantially from the flourishing cryptocurrency market. Bankera raised $150 million from its preliminary coin offering, one of the most prosperous token sales to date. Today, its founder is convinced the days of ICOs are long gone and not as a result of regulation but because of the lessening wealth in the cryptocurrency space brought on by the decreased value of digital assets.

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