On 30 June 2022, new provisions were added to the Law, some of which came into force as of 1 November 2022.
Virtual currency exchange operator – a legal entity established in the Republic of Lithuania or a branch of a legal entity of a Member State of the European Union or of a foreign state established in the Republic of Lithuania providing services of exchange, purchase and/or sale of virtual currencies for remuneration.
Depository virtual currency wallet operator – a legal entity established in the Republic of Lithuania or a branch of a legal entity of a Member State of the European Union or of a foreign state established in the Republic of Lithuania, providing services on behalf of clients for the management of depository virtual currency wallets.
In Lithuania, these entities’ operations are not licensed, but the following requirements are mandatory:
- must inform the manager of the Register of Legal Entities no later than within 5 working days from the start or termination of such activity. By providing this information, the Virtual currency exchange operators and (or) Depository virtual currency wallet operators shall certify that they, or the members of their management or supervisory bodies and beneficiaries, are familiar with and comply with the legislation on the prevention of money laundering and terrorist financing;
- (as of 1 November 2022) a legal person who has commenced the activity of a Virtual currency exchange operator and (or) Depository virtual currency wallet operator must have a senior manager who is a permanent resident of Lithuania as foreseen in the Law on Personal Income Tax of the Republic of Lithuania;
- (as of 1 November 2022) a legal person established in the Republic of Lithuania whose legal form is a public limited liability company or a private limited liability company intending to carry out the activities of the Virtual currency exchange operator and (or) Depository virtual currency wallet operator must hold a registered authorised capital of at least EUR 125 000;
- Operators of virtual currency exchanges or operators of depositary virtual currency wallets must appoint senior staff to organise the implementation of the measures for the prevention of money laundering and/or terrorist financing set out in the Law and to cooperate with the Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania (hereinafter referred to as the FCIS). Where these entities are headed by a board of directors, they must appoint a member of the board of directors to organise the implementation of the anti-money laundering and/or anti-terrorist financing measures laid down in the Law and senior staff to cooperate with the FCIS. The appointment of such staff and members of the management board must be notified in writing to the FCIS no later than 7 working days after their appointment or replacement;
- (as of 1 November 2022) The managing staff of the Virtual currency exchange operators and (or) Depository virtual currency wallet operators must not represent more than one Virtual currency exchange operator and (or) Depository virtual currency wallet operator at the same time, except where those operators belong to a single group of undertakings;
- (as of 1 November 2022) The operator of a Virtual currency exchange operator and (or) Depository virtual currency wallet operator must not operate or provide services in another State to the extent that only non-essential functions or services would remain in the Republic of Lithuania in accordance with the nature of their activities and would be performed or provided exclusively to customers of another State or, in principle, they would no longer carry out activities in the Republic of Lithuania;
- (as of 1 November 2022) other requirements for members of the management and supervisory bodies as well as beneficiary of the Virtual currency exchange operator and (or) Depository virtual currency wallet operator.
OTHER OBLIGATIONS IN THE FIELD OF PREVENTION OF MONEY LAUNDERING AND/OR TERRORIST FINANCING
Virtual currency exchange operators and depositary virtual currency wallets operators:
Must identify and verify the identity of the client and the beneficiary before entering into a business relationship.
(From 1 January 2023) Must identify and verify the identity of the customer before carrying out virtual currency exchange operations or transactions in virtual currency in funds equal to or exceeding EUR 700 or its equivalent in foreign or virtual currency or before depositing or withdrawing virtual currency into or from a virtual currency wallet, for an amount equal to or exceeding EUR 700 or its equivalent in foreign or virtual currency, whether or not the transaction is effected by one or more interrelated transactions (the value of the virtual currency shall be determined at the time of the monetary transaction or at the time of the conclusion of the transaction), unless the identity of the customer and the beneficiary has already been established.
In the case of multiple interlinked monetary transactions, the identity of the customer must be established as soon as it is established that multiple monetary transactions are interlinked. Multiple monetary transactions shall be deemed to be interlinked if the customer executes multiple virtual currency exchange transactions or transactions in virtual currency in funds equal to or in excess of EUR 700, or the equivalent amount in foreign or virtual currency, in a 24-hour period, or multiple virtual currency deposit or withdrawal transactions in a 24-hour period in a deposit or withdrawal wallet for virtual currencies in an amount equal to or in excess of EUR 700 or the equivalent amount in foreign or virtual currency.
Must provide the FCIS with the customer’s identification data and information on virtual currency exchange operations or transactions in virtual currency, if the value of such a monetary operation or transaction is equal to or exceeds EUR 15 000 or the equivalent amount in foreign or virtual currency, regardless of whether the transaction is a single monetary operation or a series of interrelated monetary operations. For the purposes of this Article, multiple interlinked monetary transactions shall be considered as multiple virtual currency exchange operations or virtual currency transactions in funds carried out in a 24-hour period, where the aggregate amount of the operations and transactions in funds is equal to or exceeds EUR 15 000, or the equivalent amount in foreign or virtual currency.
(From 1 January 2025) In order to detect suspicious monetary operations or transactions and to take measures, if necessary, in the course of a virtual currency exchange, transfer or other transaction, they must collect, store and transmit the following information to the operator of the virtual currency exchange of the beneficiary of the transaction, to the operator of the custodian of the virtual currency wallets or to a financial institution.
The Virtual currency exchange operators and (or) Depository virtual currency wallet operators shall not accept the transaction from another Virtual currency exchange operator or Depository virtual currency wallet operator, if the latter fails to comply with the requirement to transmit the above listed information.
The Virtual currency exchange operators and Depository virtual currency wallet operators shall be prohibited from opening anonymous accounts or accounts under obvious fictitious names, as well as from opening accounts or otherwise entering into business relationships without requiring the customer’s identity data or in case of a reasonable suspicion that the data recorded in these documents is false or falsified.
Must report to the FCIS about suspicious monetary operations or transactions.
Must establish internal policies and internal control procedures.
Must store information for the terms specified in the Law.
REPORTING OF SUSPICIOUS MONETARY OPERATIONS OR TRANSACTIONS TO THE FCIS
In order to provide the FCIS with information on virtual currency exchange operations or transactions in virtual currency, if the value of such monetary operation or transaction is equal to or exceeds EUR 15 000 or the equivalent amount in foreign or virtual currency (in accordance with Article 20, Paragraph 31 of the Law), or to file a report on a suspicious monetary operation or transaction (in accordance with Article 16 of the Law), it is necessary to log in to the FCIS information system and to fill out a reporting form therein.
The access data to the information system of the FCIS shall be provided by the authorised employees of the Anti-Money Laundering Board of the FCIS upon receipt of a notification from the obliged entities about the designated employees and members of the Board who would organise the implementation of the measures for the prevention of money laundering and/or terrorist financing provided for in the Law and would co-operate with the FCIS.
The FCIS is responsible for supervision of the activities of Virtual currency exchange operators and (or) Depository virtual currency wallet operators related to the prevention of money laundering and/or terrorist financing.
Our experts are ready to fully assist you in adapting your crypto company to new requirements of the FCIS. We will help you with making and registering share capital, services in finding and hiring a qualified AML/MLRO, and accompany you in resolving other nuances and circumstances that need to be resolved as the company adapts to the new requirements of the Law.
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