Lithuanian Cryptocurrency Providers Drop by Half Ahead of Regulatory Changes

The number of Lithuanian companies authorized to offer cryptocurrency services has drastically declined, dropping by over half as the country prepares to implement new regulatory requirements. This decrease comes in response to a recent rule that mandates cryptocurrency companies maintain at least €125,000 in capital.

According to Neil Samtani, CEO of VASPnet, “On the evening of October 30, the number of registered VASPs in Lithuania dropped by half, going from 348 to 316.” VASPs, or Virtual Asset Service Providers, are entities authorized to conduct transactions involving virtual assets like cryptocurrencies and traditional fiat currencies.

Samtani explained that this “seismic shift” in the number of VASPs in Lithuania is “attributed to firms failing to demonstrate that the mandated regulatory capital of €125,000 was being maintained.” He added that the upcoming implementation of MiCA, a set of EU-wide regulations on crypto assets, likely contributed to the timing of the drop. “Undoubtedly, the timing, as we approach the MiCA application date, doesn’t hurt,” he posted on LinkedIn.

The MiCA (Markets in Crypto-Assets) regulation, confirmed last year and set to be introduced gradually in 2024, aims to create a standardized regulatory framework for crypto assets across the EU. Lithuania has adopted an “ambitious transitional period” for these changes, allowing companies five months to comply, noted Samtani.

Samtani pointed out that many cryptocurrency firms have operated in Lithuania without registering as VASPs, with “over 50 of the firms” registering only this year, many within the past quarter. “The majority continue to offer crypto services, with no regulatory supervision,” he said.

By fLEXI tEAM