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LITHUANIA WANTED TO CREATE ITS OWN CRYPTO LICENSING REGIME

LITHUANIA WANTED TO CREATE ITS OWN CRYPTO LICENSING REGIME

With Brussels' significant legislation - the Crypto Assets Regulation (MiCA) - which may not work until 2025, the Baltic nation wants to do "homework" in advance, the country's deputy finance minister told CoinDesk. But plans for the bill, which will be debated in parliament, make some Lithuanian-based companies fear for their future.


The EU is in the final stages of negotiating with the MiCA. One 27-nation bloc authorization regime is in the years to come and could transform this sector by allowing businesses to buy into the hundreds of millions of markets. Some countries, however, can’t wait to capture their piece of the growing industry.


The European Commission, the EU governing body, first asked for advice on how existing laws apply to crypto in March 2018. Since then, the discovery of crypto has increased, and every effort like Facebook-backed Libra, which was renamed Diem, was reborn. he died.


Even when lawmakers have issued their final legal affiliations, such as how to deal with stablecoins such as Libra, moldless tokens and fixed fees, there will be a change period of up to two years before MiCA takes effect.


Read more: EU Commission Likes Ban on Big Money, Document Shows


“MiCA is kind of a big thing to come, it's a good decision; we support you, ”Mindaugas Liutvinskas, the deputy minister of Lithuania's finance ministry, told CoinDesk in an interview. “But before we get there, what, what? 2025, end of 2024; we still have a lot of time.


"What we have decided to do is take practical steps, do all our homework, strengthen our regulatory framework," he said, calling his proposed law a "quick fix" that MiCA can take "to the next level."


Image problem

Liutvinskas is concerned that unless he takes immediate action, underdeveloped companies could tarnish his reputation with the industry.


"For government and market participants, the worst case scenario could be to have a bad situation, some kind of scandal about money laundering or sanctions," he said. "Dignity is an important tool in this business sector."



As regulators in Estonia, Liutvinskas says he welcomes noisy companies, but not empty shells that only register in the country but operate elsewhere.


The main provisions of the proposed legislation have already been published on intelligence and will be tabled in parliament in the early summer. It includes the MiCA style requirement of holding 125,000 euros ($ 133,000) as head and having anti-money laundering staff based in the country. The industry, on the other hand, hopes the measures will be delivered through a slower timeline.


Capital

Liutvinskas has already agreed that it will not use anti-money laundering checks immediately, not least because it is not clear what the EU will expect. Negotiations were thrown into the air with what he called "out-of-the-box thinking" from the European Parliament, which seeks to tighten its grip on trading with crypto wallets that can be managed through regulated exchanges.


And it is in this area that his proposals appear to have been provoked by the crypto industry, which complains that Lithuania is the only one in the global market, because in fact many authorities around the world have not yet implemented the rules set by the Financial Action Task Force. , a global dog against money laundering.


Requirements for tangible goods service providers (VASPs) to identify their customers, even the smallest, are “unreasonable,” with over-risk management responsibilities, says Agnė Smagurauskaitė, a legal advisor at CoinGate, a Lithuanian-based payment and trading company.


"VASPs in some areas will not have the same data sharing responsibility that makes them closer to being unable to interact with them," he told CoinDesk in an email. And a shortage of the same thing as SWIFT messaging service means data can be insecure, he said.



He says he supports ways to make markets more transparent and credible, but not those that kill innovation or competitive power.


In the draft bill, "there are certain points that completely destroy the VASP Lithuanian market," he said.


Tweaks

There may be further amendments regarding the law Liutvinskas admits to "not yet fully engraved on stone." But some industry representatives are looking at a new law, which could be implemented later this year, will not do any harm to the state of affairs as a crypto hub.


Companies "usually do not like" the strict rules, Kęstutis Kvainauskas, a lawyer based at Ecovis ProventusLaw, told CoinDesk, but "Lithuanian interests are still considered liberal."



The way to go, to the rules of the MiCA style, is unavoidable, Kvainauskas believes, and perhaps smaller areas are just trying to get ahead of the game.


"At the moment, I do not see other authorities being able to offer something similar [to] what Lithuania can offer," with an authorization that gives broad market access across Europe, he said.


U.K. immigrants

The country may show an attractive home to companies fleeing places like Estonia or the U.K., where, Kvainauskas notes, the Financial Conduct Authority, the U.K. financial regulator, seems unwilling to extend its current registry regime.


Liutvinskas may object to the idea that companies simply seek to regulate it with simple rules, saying that a practice known as arbitrage control "is not what we want to have."

Source: yahoo




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