It is expected that the reform of the law will help prevent some financial crimes such as money laundering and theft, as well as raise a fence to avoid financing terrorism
Lithuania has been among the European countries that have had a significant increase in commercial activity with cryptocurrencies, so the country has decided to increase the control and supervision measures to companies that offer services related to these digital assets.
Exchanges companies, providers of shelter services and ICO promoters, (Initial Currencies Offers), are some of the main ones related to these measures. It was also known that the initiative seeks to directly promote the prevention of robbery and extortion, as well as to attack hacking and money laundering using cryptocurrencies.
The news was revealed in the last April 8th, through the media The Baltic Times, which covers countries such as Lithuania, Estonia, and Latvia. Through the press release, it was known that the Parliament of that country is creating a regulatory environment, related to these technologies, which would allow an adequate and clearer use of them. The intention is to potentiate these tools in order to grow the economy.
The Director of the Financial Market Policy Department, at the Lithuania’s Ministry of Finance, Sigitas Mitkus, gave the information about the project. In addition, he said he is enthusiastic about the legislative process as a tool of protection for merchants who use these technologies. “We want to create a transparent legal environment for virtual currency exchanges, wallet operators and ICO initiators. We also want to contribute to guarantee better consumer protection”, he explained.
As is known about the law reforms in that European country related to this matter, only the entities supported by the law and registered in the official Registry Center are operative. The law that supports these companies is the Law on the Prevention of Money Laundering and the Financing of Terrorism.
One of the most important aspects of this amendment is the duty to report to the Financial Crimes Investigation Service, all those large transactions made with cryptocurrencies in the Lithuanian territory.
Another aspect of this new reform is that all transactions made with cryptocurrencies and equivalent of 1,000 euros, must be notified to the competent body, which will request the company to ask for the identification of the client. This is in order to track the transaction and who performs it.
Mitkus commented that the statutes will also apply to the exchange houses and to convert cryptocurrencies into fiduciary money. “By introducing limits for financial operations, we go beyond the European Union directive and we will probably become the first ones in the world to implement the recommendations of the International Financial Action Task Force and apply the requirements, not only to the conversion of virtual currencies to traditional currencies, but also when converting one virtual currency into another”.
Lithuania is one of the countries which are in the process of adoption to these new technologies that have taken boom worldwide. Last year, the Ministry of Finance of Lithuania published a guide related to the issuance of ICOs, in which the Central Bank highlights its position about ICOs and digital assets.
By María Victoria Rodríguez
