Lithuania is taking crypto regulation seriously.
The institutions of the European Union are urged to speed up the process of regulating cryptocurrencies taking into account the growing number of crypto asset service providers in Europe, the current global challenges and the associated increased risk of money laundering and terrorist financing. with virtual currencies.
In an effort to combat money laundering and potential schemes by Russian elites to circumvent financial sanctions, Lithuania is stepping up its oversight of cryptocurrencies.
On Thursday, the Lithuanian Ministry of Finance banned anonymous wallets and enforced regulations on cryptocurrency exchanges in a bid to curb money laundering and other related nefarious activities.
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Lithuania to Ban Non-Custodial Crypto Wallets
If approved by the Lithuanian legislature, the proposed revisions to the current law will tighten the rules for user identification and ban anonymous accounts. According to officials, the move was made in preparation for future decisions by the European Union.
The law proposes, among other things, to tighten know-your-customer (KYC) laws for cryptocurrency exchanges and to require administrative staff of exchanges operating in Lithuania to be permanent residents of the nation.
Lithuania’s Finance Ministry has banned anonymous wallets and imposed new rules on crypto exchanges (Bitcoin.com).
The Registrar of Legal Entities will make public the names of the operators of cryptocurrency exchange houses.
Furthermore, the proposal highlights the strict regulations with reference to the rapid growth of the crypto industry and unique geopolitical concerns.
Adding more teeth to crypto regulation
Given international regulatory trends and the geopolitical situation in the region, where many Western nations impose financial and other sanctions on the Russian Federation and Belarus, it was emphasized that more sophisticated regulation of crypto service providers is also required.
The proposed legislation would also increase the requirements imposed on exchange operators. As of January 1 of the following year, they must register as a legal entity with a minimum nominal capital of 125,000 euros.
Following the tightening of restrictions in neighboring Estonia, the number of crypto businesses in Lithuania has grown dramatically.
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Crypto total market cap at $1.21 trillion on the daily chart | Source: TradingView.com
FCIS will intensify supervision
In view of the enormous efforts of the authorities to minimize the risks posed by the activities of crypto asset service providers, it is anticipated that the Financial Crimes Investigation Service (FCIS) will intensify its inspections of these companies.
The European Parliament recently voted to pass anti-anonymity regulations for the cryptocurrency industry, which would significantly complicate transactions between non-custodial wallets and cryptocurrency service providers.
The proposal has been disputed by numerous crypto advocates, including Coinbase CEO Brian Armstrong.
Even though the cryptocurrency industry has achieved a prominent place in the global financial sector, it is still viewed with skepticism and suspicion by some.
Featured image from The Coin Republic, chart from TradingView.com