Cryptocurrency Exchange and Cryptocurrency License in Lithuania

Lithuania is a well-established leader in digital economics and fintech. The experience of local authorities and the willingness of government officials to embrace innovative technology while maintaining leading positions in many domains made it an important destination for all cryptocurrency investors, developers, and enthusiasts.

Relatively simple yet cost-effective digital authorization of cryptocurrency depositories and exchanges is one of the main services provided by Lithuania to foreign investors that would like to expand their presence in Europe.

Cryptocurrency license in Lithuania

Foreign investors may obtain a crypto license in Lithuania using one of two available types of authorization

A Crypto currency exchange operator is a legal entity or its affiliate that offers exchange and swap services to their clients for a fee. Such operators receive a cryptocurrency exchange license and can sell, purchase, or otherwise transfer cryptocurrencies and fiat money and charge their clients a fee for such services.
Crypto wallet and custodian services license is issued to a company that would like to focus on managing funds belonging to their clients. Such services may include storing, swapping tokens and coins, generating and storing encrypted keys, and more. It is also called Cryptocurrency Depositary Wallet operator license.

How much does it cost to acquire a cryptocurrency license in Lithuania?

Investors running a crypto exchange company would like to reduce costs by all means possible. We offer a flexible product package with informative, expert-level consultations, and quick delivery. Simultaneously, the interests of clients are prioritized as we offer cost-effective, versatile solutions to all investors interested in working with cryptocurrencies, blockchain technologies, and digital assets within Europe.

Package:	BASIC	CUSTOMIZED	EXTENDED	FULL	READY-MADE
Services:	Assistance With company formation and FNTT registration	Individual procedural rules in accordance with business model + basic maintenance	Corporate account for operating activity and set of corp. documents	MLRO with local residence + employment and entire maintenance	MLRO with local residence + employment and entire maintenance
Set-up fee:	€ 2300	€ 4300	€ 5300	€ 6300	€ 9500
Maintenance fee: (monthly)	0€ / month	€35 / month	€90 / month	€945 / month	€945/ month

Do you want to know more about prices and all the nuances? Fill out the form and we will contact you for a consultation

Requirements for companies seeking a crypto license in Lithuania

Applicant companies must comply with several requirements implemented to ensure the transparency, legality, and goodwill of the business. All board members of the company are required to have an excellent reputation and no prior history of criminal activity recorded. All companies that want to work in Europe and Lithuania with cryptocurrency must meet the following requirements:

Must have at least one owner (a person or an entity)
Must have at least one board member (owner can be both)
Must have a dedicated Compliance Officer
Must have a virtual address in Lithuania
The company must check the IDs and background checks of all its clients
The company must store clients’ data in a way allowing for possible inspections by the regulatory body
Must have corporate mechanisms to assess risks and ensure proper operability
The company must comply with any demands from the Financial Crimes Investigation Service (FCIS)

Foreign investors can be represented by local representatives or engage with the regulator remotely. The physical presence of any of the board members is not required.

General licensing information

Legislations surrounding the topic of crypto currency in Lithuania are complex and many factors determining how a token is regulated depend on the type of the ICO and token. Two main categories are recognized in the country:

In short, the general information about acquiring a cryptocurrency licence in Lithuania can be summed up with several statements:

The Lithuanian Law on Securities is the main legislation regulating ICOs and tokens that can be described as securities;
The Lithuanian Law of Crowdfunding regulates all ICOs and tokens that can be described as projects with publicly sourced financing;
The Lithuanian Law on Markets in Financial Instruments regulates ICOs and tokens that can be described as financial instruments;

Any entities that received their funding using ICO are subjected to multiple laws including those regulating Collective Investments, Collective Investment Undertakings Intended for Informed Investors, and Collective Investment Undertakings Intended for Professional Investors.

Note that all of the operations related to using, selling, purchasing, exchanging, swapping, and using securities such as tokens are also subjected to scrutiny under the Counter-Terrorist Financing Law and the Anti-Money Laundering Law.

Three main bodies are responsible for all issued licenses: the Bank of Lithuania, the FCIS, and the Business Register. Note that FCIS is a fully independent department of the Lithuanian Police force.

General provisions for obtaining a cryptocurrency exchange operator license

If general requirements described above in the “requirements for companies seeking a license” section are met, the regulator still may demand additional information including an expanded version of any activities related to cryptocurrencies. When all the information is received and deemed sufficient by the regulator, a license can be issued.

In case of changes in the structure of the applicant company after receiving the license, the company must immediately inform the regulator and necessary changes must be added to the registry. Such changes may include address, owner, board members, beneficiaries, and AML officers.

Accounting must be conducted according to state regulations. The company must comply with demands from tax authorities that regulate all businesses operating within the country. Commonly used AML/KYC practices must be implemented in the corporate structure of the applicant company.

Documents required for the application

Due to the complexity of the Lithuanian law regulating cryptocurrencies, the initial verification process may seem complicated. However, the list of documents needed to go through the whole process effortlessly is not too long containing several papers that an applicant must submit:

A valid copy of an ID issued by their home country
Power of Attorney in cases when the license is obtained remotely
A full description of the business model of the company
CVs and summaries of expertise of all participants of the project
Domain and website where the service will be conducted
All board members, owners, UBOs, and AML officers must submit a certificate of criminal record (less than 3 months old)

Personal information and IDs of all UBOs must be submitted upon receiving a request from the FCIS.

AML/KYC compliance as required by the FCIS

In Lithuania, a cryptocurrency license is issued only after an applicant company assessed risks and internal security measures before applying. Additional information will be required to evaluate AML/KYC practices at the company:

Assessment of the risk level
Types of risks
Nationality of board members, owner, and the entity
Procedures employed to control transactions
The original source of funding
A complete audit of compliance monitoring
Due diligence
Notification obligations

Additionally, the applicant company must disclose how it processes information about clients and transactions, agree to work together and comply with the demands of the regulator, submit rules of the internal control in written form.

The FCIS requires an applicant company to have an AML compliance officer meeting some basic requirements for the position including exceptional reputation, professional aptitude, specialized education, relevant experience, and good personal qualities. To ensure that all AML measures are utilized to their fullest potential, all KYC/AML officers and employees must undergo additional specialized training.

Accounting and Taxation

All companies operating in Lithuania are subjected to the same rules and regulations in terms of accounting. Strict AML legislation requires all companies to have a bank account, issue financial statements and undergo audits when necessary.

All of the regulations related to accounting can be found in the Republic of Lithuania Accounting Law and are applied to:

Note that most applicant companies fall under one of the categories and thus must comply with Lithuanian accounting standards.

Licensing process

To open a Lithuanian company operating as a crypto business, an applicant must create a limited liability company (UAB) which is the most commonly used business form in the country. While other forms of business exist, it is strongly recommended to use the UAB structure. UAB stands for Closed Joint-Stock Company in Lithuanian language.

Receiving a crypto exchange license is done in several distinct steps:

Creation or signing a cooperation agreement with a Lithuanian UAB.
Preparation of documents required for the licensing procedure.
Registration of the company (takes up to 5 business days).
Preparing the company for the application according to the regulator’s requirements.>
Applying for the cryptocurrency license in Lithuania.
Waiting until the application is reviewed by the FCIS (up to 30 business days).

Taxation of crypto companies

Any business must have a license when opening a Lithuanian company. Additionally, all legal businesses operating within the country must comply with taxation rules.

While cryptocurrencies are not subjected to any specialized taxes, all sales are considered standard sales, and transactions must have VAT (value-added tax) and a price in euros for accounting purposes. All payments for goods and services are subjects of VAT which must be paid and returned when possible in euros.

All service providers (cryptocurrency operators) are subjected to standard/normal VAT regulations (15% rate). If a company operates with less than 10 full-time employees and has less than €300 thousand annual gross income, a reduced tax rate will be used ranging from 0% to 5% depending on a variety of other conditions.

The FCIS and its purpose

The European Union has a strict stance on AML rules. To ensure that businesses from Lithuania can work normally in all countries in Europe, the Lithuanian government formed the FCIS which is an independent unit of the Police force. The main mission of the organization is to prevent, uncover, and punish criminal acts within the financial system of Lithuania.

The FCIS conducts audits of AML/KYC practices employed by companies operating within the country, uses various preventive measures to protect the economy from fraudulent activities, combat money-laundering, assesses all forms of financial and economic activities conducted by legal entities and persons as well as examines all participants of the economy seeking for those evading taxes.

Compliance Specialist

A compliance specialist is an employee or a contractor at your organization. The specialist is responsible for keeping your company up to date with all the regulations and requirements that may be enforced in the country where your business is conducted. Note that all businesses must comply with Lithuania cryptocurrency regulations.

Specialists not only provide valuable insights and consultations but also conduct audits and investigations to build better structures within the company, employ new practices, and follow the law in all corporate processes. For companies that operate under a government-issued license, it is crucial to have an experienced compliance specialist to avoid legal problems or losing your license altogether.

What to do to retain your cryptocurrency license?

Breaking the rules of AML/KYC policies is a sure way to lose a license. It is critical to maintain transparency, legality, and accounting at the level acceptable in Lithuania. Hiring a well-trained compliance specialist is key to success.

Consulting with specialized agencies and attorneys before conducting a serious business or administrative change is also crucial since all changes must be reflected in the registry.

The main takeaway

A Lithuanian cryptocurrency license is a gateway to European markets for many foreign entrepreneurs aiming to expand their corporate presence or launch a startup. If your company wants to build new, exciting technology and participate in one of the best crypto markets in the world, consider obtaining a license in Lithuania. Our specialists will help you get through all the bureaucracy and technicalities.

Contact our specialists right now to learn more about compliance rules, services, and prices! Start your cryptocurrency business in Lithuania now!