Lithuania is one of the countries where people can make legitimate financial transactions with cryptocurrencies. It is one of the few countries in the European Union. There is a formal initiative for the government to run and regulate cryptocurrency trading. Crypto licence in Lithuania is relatively easy but some legal requirements should be taken into consideration.

Lithuania is a country that has taken essential steps in the traditional financial sector and e-money licensing. Accordingly, the Lithuanian government has authorized a transparent and cost-effective virtual currency. It has facilitated trading with cryptocurrencies.

Getting a Crypto Licence in Lithuania

Even if some European countries impose restrictions on crypto activities, people’s interest in cryptocurrencies is an ongoing reality. People want a suitable legal environment to do business with virtual currencies. Regulatory countries such as Lithuania offer this environment.

Lithuania has had a cryptocurrency regulation in effect since 2020. It provides a legal environment for companies that offer exchange and wallet services related to cryptocurrencies. In this environment, everything is organized clearly and transparently. There are two types of crypto licences in Lithuania:

• Cryptocurrency exchange license: The company holding a cryptocurrency exchange license receives a commission for its services. Its service is to convert digital currency to traditional currency and vice versa.
• Crypto wallet and custodian services license: A company holding a crypto wallet and custodian services license may offer customers encrypted customer keys to store crypto assets. It does this by offering a crypto wallet to its client.

Lithuania has managed to become one of the crypto-friendly companies since 2020. After creating the necessary legal environment, many companies have invested in the country. In the face of money laundering and similar approaches, the government strictly carries out essential inspections.

Requirements for the Applicant Company

The Lithuanian government strictly regulates the activities of crypto companies to prevent the legalization of proceeds of crime. Legal institutions carry out required audits. In general, the requirements for starting a company in the cryptocurrency sector in Lithuania are as follows:

• Regardless of whether a natural or legal person, the company must have an owner.
• The company founder(s) should not have any criminal record.
• At least one person (company owner is valid) must be on the company’s board of directors.
• Persons who will take place on the company’s board of directors should not have any criminal records.
• The company must have at least one Anti Money Laundering Officer (AML).
• The owner or power of attorney must submit the company’s virtual address in Lithuania.
• The company should perform background checks and identification procedures for all company customers.
• The company’s customer information must be stored to be submitted to regulatory authorities.
• The company should have the necessary internal control and risk assessment procedures.

The founder or board members of the company that will be engaging with cryptocurrencies do not need to be physically located in Lithuania. Even non-Lithuanian citizens have the right to engage in crypto-related activities in the country legally.

The Procedure for Obtaining a Cryptocurrency Licence in Lithuania

In the licensing process, all control will be with the issuer. The regulator may request additional information about the activities of the cryptocurrency company. The regulator may request additional information in documents if it wishes. Companies must be able to provide all information in full to obtain a crypto licence in Lithuania.

After the company has obtained the crypto license, it has to notify if there is any change in the company structure. Suppose the company address, company owner, board member, beneficiary, or AML officer has changed. In that case, it must be fully documented and included in the registry.

The Business Register accepts the application for a crypto license. Controls are regulated by the Financial Crime Investigation Service (FCIS), and The Bank of Lithuania evaluates the application. Besides, FCIS is an independent part of the Lithuanian Police and Border Police Department.

The company that will acquire a crypto license is not required to file a special tax declaration. Accounting procedures are the same as for other Lithuanian companies. FCIS may make inquiries about the company at any time. Also, FCIS specifically performs stringent checks on compliance with the KYC requirement.

Process of Obtaining a Cryptocurrency Licence in Lithuania

To be able to apply for a cryptocurrency license, it is necessary to set up a limited liability company (UAB) in Lithuania. There is a minimum requirement of € 2,500 for the company’s capital. There is no need to physically visit Lithuania to establish a company that will engage in cryptocurrency activities.

• First, you should prepare all the documents required to establish the company.
• After the necessary application is made, the company’s establishment will take approximately five business days.
• The company owners must appoint an anti-money laundering officer (AML) to the company.
• The AML Officer must be a resident of Lithuania as they will be the bridge between the company and the government.
• Applicants must create a form for the company to apply for a cryptocurrency license. AML rules will take approximately seven business days to prepare and complete.
• Once the company is established and the documents are ready, applicants can make an application for a cryptocurrency license.
• FCIS evaluates the application within 20 working days from the date of application.

Authorized institutions may complete the application in less time if you have submitted all required documents for the cryptocurrency license in full. However, some people may prefer to purchase a license to not deal with all these procedures.

Documents for Obtaining a Crypto Licence in Lithuania

The applicants must carefully review the required documents to obtain a crypto license in Lithuania. These documents are subject to strict control. It is essential that all the information you provide is accurate and meets the requirements for obtaining a crypto license.

• Copy of the official passport of the person from the country of residence who wants to establish the company.
• Power of attorney document if the person who wants to establish the company will not visit Lithuania.
• A detailed description of the company’s activities and the company’s operating model.
• Resumes of all employees who will work in the company.
• Criminal record of all employees who will work in the company. This document should not be older than three months.
• Address information of the website where the company will offer cryptocurrency services.
• Report/document containing individual details for all beneficial owners.

FCIS may request additional information from all companies engaged in cryptocurrency activities. If the above documents are not submitted in full, the application will be rejected or suspended. However, companies must comply with KYC/AML procedures.

Risk Assessment, KYC/AML Documents, and Procedure

Before attempting to obtain a crypto license in Lithuania, all documents describing the in-house structure must be submitted by owners/applicants. The build or model for the company must meet AML (anti-fraud) and KYC (know your customer) criteria. The FCIS has determined these criteria.

• Internal security measures and hazard analysis.
• Money laundering and financial fraud risk analysis.
• Proper calculation of risk percentages.
• Adequate determination of the risk level.
• Determination of transaction regulation processes in the company’s activities.
• Information on the source of company funding.
• Meeting internal audit procedures and compliance monitoring.
• Control measures that work as needed.
• Fulfillment of obligations regarding notifications.
• Storage of documents for cooperation between the company and its customers.
• Compliance with regulatory agency requirements.
• Determination of the company’s internal control rules.
• Identification of transactions with a low percentage of risk and setting procedures.
• Determining the risk percentage and monitoring rules for communication with the customer.
• Determination of a set of rules for due diligence.
• Analysis of customers and their documents.
• Records for customers’ residential addresses.
• Regulations and documents for collaborating with companies with client status.
• Identifying specific notification requests.

Before applying for a cryptocurrency license in Lithuania, you should make sure that you meet all these requirements. FCIS sets AML and KYC requirements. Flawless compliance with these requirements is essential for all companies seeking/receiving a cryptocurrency license.

Check our other activities for AML & KYC.