The EU’s latest decision to restrict the usage of non hosted wallets appears to be taking effect. A state in Europe has taken the first step to outlaw non hosted crypto wallets.
Lithuania Moves To Ban Anonymous Crypto Wallets
The government of Lithuania has taken steps to tighten its crypto regulations. The government made a move after the recent notice by the EU. The new law will improve licenses for crypto firms and ban anonymous wallets.
The Finance Ministry has approved the recent amendment to the “Law on the Prevention of Terrorist Financing and Money Laundering.” The aim is to increase the level of transparency in the crypto industry.
Meanwhile, the law would also give room for sustainable development. However, Lithuania’s legislature, the Seimas, will have to approve it before it becomes law.
Also, the legislation seeks to place a ban on the operations of anonymous crypto accounts. This will involve tightening the KYC regulation for exchange firms. Crypto investors will have to provide identities for verification.
According to the Registrar of Legal Entities in Lithuania, the names of operators of crypto firms will be made public. This is to ensure fairness and transparency at all levels.
Besides, the Ministry of Finance fully supports the regulatory measures. The agency believes it will combat terrorist financing, money laundering, and evasion of sanctions by Belarus and Russia. Also, it will help protect the investors in Lithuania and the state in general.
Improved Regulation For Crypto Firms In Lithuania
Furthermore, Lithuania’s regulation will also tighten the license requirements for crypto firms. This will take effect from the 1st of January, 2023. All crypto firms will have to register as corporate organizations.
In addition, they must have a nominal capital of about 125,000 euros. The senior manager of the firm must reside in Lithuania permanently as well.
Also, Gintarė Skaistė, Finance Minister, added that
The authority is taking steps to tighten regulations at the national level. This is to prepare it for further decisions at the EU level.”
Recently, Europe’s parliament voted to improve anti-anonymity regulations for the crypto sector. This regulation would make it difficult for non-custodial wallets to transact with crypto firms.
Meanwhile, several advocates in the crypto industry have criticized the legislation. Among them is Brian Armstrong, CEO of Coinbase.
Currently, the number of cryptocurrency firms is increasing in Lithuania. This is due to the strict regulations imposed on them in neighboring countries. For example, Estonia has tightened the licensing requirements for crypto firms.
Additionally, in 2020, only eight crypto firms were present in Lithuania. However, the Finance Ministry noted that over 220 new firms had joined the list.