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    Crypto Licensing

    If you’re looking to start a crypto-related business, obtaining a crypto business license (VASP) is a crucial step in ensuring that your business operates legally and in full compliance with the current EU crypto regulation. Registering a company and obtaining a cryptocurrency license (authorization) in Lithuania will provide you with the opportunity to offer cryptocurrency exchange and cryptocurrency wallet services as well as many others in the field of the EU without violating the law.

    Our legal team specializes in helping clients navigate the complex regulatory landscape of the crypto industry and obtain the necessary crypto licenses in Lithuania and other EU countries in order to operate their businesses. Lithuanian crypto license will undoubtedly become an effective tool for your business, since Lithuania is considered as a Fintech Hub, therefore you may easily establish partnerships with EMIs and create a perfect crypto-fiat gateway.

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      Advantages of Having the Crypto License in Lithuania

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      • Legitimacy – operating with a crypto license can give your business legitimacy in the eyes of investors, customers, and other stakeholders. It demonstrates that your business is compliant with relevant regulations and is committed to maintaining high standards of transparency. Additionally, a crypto license Lithuania provides official authorization from the state to conduct and regulate Cryptocurrency Lithuania Business;
      • Access to marketing – having a crypto license in Lithuania, you may give your business a competitive edge over other businesses due to access to the various marketing channels, such as Google Ads, Facebook Ads, etc. It can also help your business gain visibility and attract more customers interested in European crypto and European crypto exchange services;
      • Banking services – most of the banks and FinTechs are not willing to cooperate with unlicensed (un-authorized) crypt-related businesses. By having a Crypto Exchange Europe, it is easier to establish banking relationships, which is crucial for conducting business transactions and creating crypto-fiat gateway. Furthermore, complying with EU crypto regulation and having a crypto license can provide your business with access to European cryptocurrency markets;
      • Reduced regulatory risks – operating without a crypto license can expose your business to legal risks and potential penalties, fines, which may be issued by the supervisory bodies. Obtaining a crypto license and complying with crypto regulation EU can eliminate these risks and ensure that your business is well-positioned for growth and success. Additionally, knowing how to set up a crypto exchange and obtaining a cryptocurrency exchange license can be key to success in the crypto industry, as it allows your business to legally and safely operate a cryptocurrency exchange platform.

      Types of Crypto License (authorization) in Lithuania

      Virtual Asset Service Provider (VASP) License

      Crypto Exchange License

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      This license entitles crypto business to exchange cryptocurrencies for fiat and vice versa, as well as exchange one virtual asset for another. This type of crypto license includes online Crypto Exchange, as well as physical (e. g., Crypto ATMs).

      Crypto Wallet License

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      This license entitles crypto business to create and manage customers’ crypto custodial wallets, as well as offer and provide the ability to store customers’ crypto assets in designated wallets.

      It shall be noted that according to the Lithuanian crypto market supervisory body (FCIS) more crypto related services may be provided under the Lithuanian crypto license (VASP Crypto authorization). However, each VASP Cryptocurrency business model shall be assessed on case-by-case basis.

      Main Requirements for Crypto License (VASP authorization) in Lithuania

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      1. Increasing the share capital of VASP authorized companies to at least EUR 125,000;
      2. Requiring VASP authorized companies to appoint at least one MLRO (Money Laundering Reporting Officer);
      3. Prohibiting VASP authorized companies from opening anonymous accounts or accounts with fictitious names;
      4. Significantly tightening the requirements related to the impeccable reputation of managers, management/supervisory bodies, as well as Ultimate Beneficial Owners (UBOs).

      Process of Obtaining Lithuania Cryptocurrency License (VASP authorization)
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      1. Registration of a legal entity in Lithuania;
      2. Application for the crypto license (VASP authorization);
      3. Employment of the employees (CEO and AML Officer / MLRO);
      4. Provision of information to the FCIS regarding the appointed AML Officer / MLRO;
      5. Opening operational bank account;
      6. Preparation of all internal policies and documents (i.e., AML Policy with Annexes, Terms & Conditions, Privacy Policy, etc.).

      Additional Services Related to Obtaining Crypto License (VASP authorization)
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      1. Establishment of organizational structure – assistance identifying the appropriate legal structure, incorporation of holding companies in tax efficient jurisdictions, transferring companies shares, designing ownership structure, etc.;
      2. Tax advisory – guidance and advice regarding tax obligations and liabilities, minimizing tax liabilities from cross-border activities, creating a tax planning strategy, etc.;
      3. Preparation of internal documentation – preparation of tailor made AML / CTF Policy with Annexes, Terms & Conditions, Privacy Policy, Cyber Security Policy, etc.;
      4. Assistance in hiring employees – guidance and support to employers who are looking to hire new staff. Such service includes potential employees background / knowledge check, interviewing, establishment of employment policies and procedures, etc.;
      5. Assistance in creating partnerships – support and advisory in various potential partnerships and collaborations with other entities in terms of additional services (e. g., IT, KYC, banking service providers) or additional financing (e. g., organizing meetings with VC, agnel investors, preparation of pitch deck, etc.);
      6. Legal support in other crypto related projects – assistance in token offering legal support (ICO/STO/IEO), private placement rounds, preparation of legal opinions, analysis of business models, etc.

      For more please see our Services page.

      Markets in Crypto Assets (MiCA) license

      (comes into force mid 2024)

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      MiCA Sets up New Requirements for the Crypto-asset service providers (CASP):

      1. The requirements for the contents of “white paper” during the initial coin offering (ICO) are established;
      2. Requirements for issuers of asset-linked tokens and their supervision are established;
      3. Requirements for issuers of e-money tokens and their supervision are established;
      4. Requirements are set for significant tokens linked to assets and e-money tokens;
      5. Defining the conditions for issuing, maintaining and operating license for crypto asset service providers (CASP) in the Europe; etc.

      MiCA includes various crypto-asset-related services which may be provided by the Crypto-asset service providers (CASP):

      1. Class 1
        1. reception and transmission of orders on behalf of third parties; and/or
        2. providing advice on crypto-assets; and/or
        3. execution of orders on behalf of third parties; and/or
        4. placing of crypto-assets.
      2. Class 2
        1. custody and administration of crypto-assets on behalf of third parties.
      3. Class 3
        1. exchange of crypto-assets for fiat currency that is legal tender;
        2. exchange of crypto-assets for other crypto-assets;
        3. operation of a trading platform for crypto-assets.

      Accordingly, the requirements for Crypto-asset service providers (CASP) set up in MiCA will depend on the Class of services to be provided. For example, the minimum size of the authorized capital of Class 1 – EUR 50,000, Class 2 – EUR 125,000 or Class 3 – EUR 150,000.

      New MiCA Requirements for Crypto-asset service providers (CASP)
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      1. prepare internal documents related to the Crypto-asset service providers (CASP) activity, such as:
        1. the programme of operations;
        2. description of crypto-asset service provider’s governance arrangements;
        3. descriptions of the internal control mechanism;
        4. risk assessment procedure and business continuity plan;
        5. descriptions of IT systems and security measures;
        6. procedures to handle complaints from clients, etc.
      2. provision of general information (criminal records, source of funds, etc.) of all natural persons who, directly or indirectly, hold 20% or more of the share capital or voting rights of Crypto-asset service provider (CASP);
      3. requirement to appoint exclusively qualified and experienced key management persons;
      4. use adequate, proportionate resources and procedures, including resilient and secure information and communication technology (ICT) systems;
      5. Safekeeping clients’ funds by immediately depositing funds in a central bank or credit institution;
      6. ensure proper oursourcing of operational functions related to crypto-asset services;
      7. General requirements of custody and administration of crypto-assets; etc.

      Additional Services Related to Obtaining Crypto License (CASP license)
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      1. Establishment of organizational structure – assistance identifying the appropriate legal structure, incorporation of holding companies in tax efficient jurisdictions, transferring companies shares, designing ownership structure, etc.;
      2. Tax advisory – guidance and advice regarding tax obligations and liabilities, minimizing tax liabilities from cross-border activities, creating a tax planning strategy, etc.;
      3. Preparation of internal documentation – preparation of tailor made AML / CTF Policy with Annexes, Terms & Conditions, Privacy Policy, Cyber Security Policy, etc.;
      4. Assistance in hiring employees – guidance and support to employers who are looking to hire new staff. Such service includes potential employees background / knowledge check, interviewing, establishment of employment policies and procedures, etc.;
      5. Assistance in creating partnerships – support and advisory in various potential partnerships and collaborations with other entities in terms of additional services (e. g., IT, KYC, banking service providers) or additional financing (e. g., organizing meetings with VC, agnel investors, preparation of pitch deck, etc.);
      6. Legal support in other crypto related projects – assistance in token offering legal support (ICO/STO/IEO), private placement rounds, preparation of legal opinions, analysis of business models, etc.

      For more please see our MiCA Licensing page.

      FAQ’s

      Crypto license (VASP authorization)

      It takes two to four weeks from the receipt of all documents.

      Yes, all legal assistance may be performed under the Power of Attorney, which shall be apostilled/legalized depending on the issuance jurisdiction. By structuring the crypto licensing (VASP authorization) process in this manner, the client’s physical presence is not mandatory.

      Only a minor presence is required. Most of the employees, management, shareholders may be foreigners and do not have to reside in Lithuania. However, it would be advisable to employ a local AML Officer/MLRO in order to ensure suitable communication with the supervisory bodies.

      A company can be licensed (obtain authorization) as a cryptocurrency exchange and depository cryptocurrency wallet service provider. However, the Lithuanian crypto market supervisory body (FCIS) indicates that most crypto-related services may be provided under the Lithuanian crypto license (VASP authorization). Nevertheless, each business model shall be assessed on a case-by-case basis.

      There are no annual government fees or expenses for having a crypto business (VASP) in Lithuania. Expenses solely depend on the business activities and factual circumstances, such as personnel, required service providers, office, etc.

      Nevertheless, each virtual asset service provider shall have at least an MLRO/AML Officer in place. Thus, taking into consideration MLRO/AML Officer remuneration, office costs, and accounting services, the costs for maintaining a legal presence in the EU may start from 3,000 – 5,000 EUR/month.

      Markets in Crypto Assets (MiCA)

      Markets in Crypto-Assets (MiCA) Regulation, is a proposed regulatory framework for crypto-assets in the European Union (EU). Which was approved on 20 April, 2023 by European Parliament with 529 votes in favour to 29 against and 14 abstentions. MiCA is considered as a first piece of EU legislation for tracing transfers of crypto-assets and electronic money tokens.

      Currently regulation is in the adoption period for 12-18 months. Afterwards, MiCA shall come into full effect. Thus, adoption period may end in mid 2024.

      During this period Crypto-asset service providers (CASPs) prepare all the internal compliance policies, procedures, comply with the capital requirements, etc.

      However, after obtaining Crypto-asset service providers (CASPs) license under the MiCA. Crypto-asset service providers (CASPs) may provide crypto related services throughout the EU without any limitations or additional authorizations.

      The amount of capital required for crypto-asset service providers varies depending on the type of services they offer. There are three classes of providers, each with different permitted activities and minimum capital requirements.

      Class 1 providers are allowed to offer services such as order taking and transfer, advice, placement, portfolio management on crypto-assets, and crypto-asset transfers. They must maintain a minimum capital of €50,000.

      Class 2 providers can offer all of the services of Class 1 providers, as well as custody and management of crypto assets on behalf of third parties, exchange of crypto assets for funds, and exchange of crypto assets for other crypto assets. They must maintain a minimum capital of €125,000.

      Class 3 providers are permitted to offer all of the services of Class 2 providers, as well as operate a crypto-asset trading floor. They must maintain a minimum capital requirement of €150,000.

      These minimum capital requirements have been set to ensure that crypto-asset providers have adequate financial resources to meet their obligations to customers and comply with regulatory requirements.

      CASP after obtaining or updating a current license will have a right to provide crypto-related services in the whole EU without any limitations. Additionally, CASPs may accept clients outside EU, however, direct marketing limitations outside EU may be applied.

      The services offered by crypto-asset providers can be categorized into different types:

      1. Storage of crypto assets – this involves the secure storage and administration of crypto assets, including their private keys, on behalf of third parties.
      2. Trading Platform for Crypto Assets – this includes the management of one or more multilateral systems that allow for the exchange of crypto assets.
      3. Exchange of crypto assets – this service involves the buying or selling of crypto assets in exchange for fiat currencies.
      4. Execution of Orders – Crypto-asset providers (CASPs) may offer brokerage or mediation services, which include signing agreements to sell or buy crypto assets on behalf of a third party, and agreeing to sell them at the time of issuance.
      5. Placement of Crypto-Assets – marketing and promoting crypto assets on behalf of the offeror or issuer of the assets to potential buyers.
      6. Accepting and Transmitting Orders on Behalf of Third Parties – this service involves receiving orders to buy or sell crypto assets on behalf of a customer and transmitting that order to a third party for execution.
      7. Portfolio Advisory and Management – managing investment portfolios, including crypto assets, including those executed on behalf of clients by pre-agreed mandates.

      By providing these services, crypto-asset providers ensure the efficient functioning of the crypto asset market. It is important to note that the minimum capital requirements for each type of service provider differ based on the class of services they provide. This ensures that they have sufficient financial resources to meet their obligations to customers and comply with regulatory requirements.

      Yes, after MiCA regulation comes into the force (second half of 2024) already authorized VASPs will have to undergo re-licensing process due to additional requirements. However, it is expected that re-licensing process for already authorized VASPs shall be easier and more time consuming, taking into consideration already prepared internal procedures, good understanding of programme of operations and etc.

      Currently it is still difficult to estimate, since there is no practice established. However, according to the position of the Bank of Lithuania, it is expected to be anywhere around from 3 to 6 months.

      Yes, all legal assistance may be performed under the Power of Attorney, which shall be apostilled/legalized depending on the issuance jurisdiction. By structuring the crypto licensing (CASP authorization) process in this manner, the client’s physical presence is not mandatory.

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