Lithuania has begun cracking down on crypto companies in an effort to address money laundering and anti-terrorism concerns.
- Cryptocurrency and crypto-related industries have grown significantly in Lithuania over the past year. The industry has expanded five-fold in just that time, Bloomberg reports.
- On Thursday, Lithuania’s Ministry of Finance announced a new set of regulations that tightens the grip on who the government says is compliant with its crypto rules. The list of companies currently compliant shrank from 850 in November to 206. The country has also revoked hundreds of individual crypto licenses in the past year.
- The new rules laid out will require outstanding companies to meet new transparency rules and limitations in an effort to weed out corruption and market instability.
Why It’s News
Last year was a poor one for cryptocurrency, with the collapse of half a dozen major exchanges —including FTX, Terra, Luna, Three Arrows Capital, Voyager Digital, Celsius, and BlockFi—and the remainder of the market is facing devaluation and federal scrutiny.
These high-profile failures and volatility have drawn the attention of regulators in the U.S. and abroad, eager to reign in the crypto markets to prevent fraud and abuse. In the past few months, the White House, the Department of Justice, the Securities and Exchange Commission, the Federal Reserve, and Congress have all advocated cracking down on crypto.
As Bloomberg notes, Lithuania is facing its own list of crypto corruption scandals and worries. An influx of registrations for crypto licenses from Estonia and money laundering concerns have brought the country’s regulators down against crypto. The country’s actions also reflect fears that similar events to the collapse of FTX could adversely affect the country’s financial system.
“Companies in Lithuania now need to meet fresh transparency and supervision requirements, according to rules laid out in new anti-money laundering and terrorist-financing legislation. The minimum threshold for startup capital was set at 125,000 euros ($137,450),” says Bloomberg.