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*home* Financial Crime Investigation Service under The Ministry of the Interior of the Republic of Lithuania

Information for legal entities carrying out the activities of virtual currency exchange operators and (or) depository virtual currency wallet operators in the Republic of Lithuania

The amendments of the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania (further on referred to as: the Law) have been made and since 10 January 2020 the Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators became subjects to the prevention of money laundering and/or terrorist financing regime.

Virtual currency exchange operator shall mean a legal person who is established in the Republic of Lithuania or who is a branch, established in the Republic of Lithuania, of a legal person of a Member State of the European Union or a foreign state and who provides services of virtual currency exchange, purchase and/or sale for remuneration.

Depository virtual currency wallet operator shall mean a legal person who is established in the Republic of Lithuania or a branch, established in the Republic of Lithuania, of a legal person of a Member State of the European Union or a foreign state and who provides services of management of custodian virtual currency wallets on behalf of the customers. 

 

The activity of Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators is not licensed in Lithuania; however, there is a mandatory requirement to inform the manager of the Register of Legal Entities no later than within 5 working days from the start or termination of such activity. By providing this information, the Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators shall certify that they, or the members of their management or supervisory bodies and beneficiaries, are familiar with and comply with the legislation on the prevention of money laundering and terrorist financing (Request and Notification Forms here).  

Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators must designate senior employees for organising the implementation of money laundering and/or terrorist financing prevention measures specified in the Law and for liaising with the Financial Crime Investigation Service (further on referred to as: the FCIS). Where the Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators are led by the board, the financial institutions and other obliged entities must designate a member of the board for organising the implementation of money laundering and/or terrorist financing prevention measures specified in the Law and senior employees for liaising with the FCIS. The FCIS must be notified in writing of the designation as well as replacement of such employees and board members not later than within 7 working days from the date of their designation or replacement.

A natural person who has been found guilty of committing a serious crime against property, property rights and property interests, the economy and business order, the financial system, the civil service and the public interest, and has an unexpired or unexpunged conviction may not be a Virtual Currency Exchange Operator and Depository Virtual Currency Wallet Operator, or the beneficial owner of such persons.

 

Initial Coin Offering (ICO)

Initial Coin Offering (ICO) shall mean an offer made for the first time directly or through an intermediary by a legal person established in the Republic of Lithuania or a branch of a legal person of a Member State of the European Union or a foreign state established in the Republic of Lithuania to purchase its virtual currencies for funds or other virtual currencies with a view to raising capital or investment.

Although legal entities conducting initial virtual currency offering (ICO) are not considered as obliged entities in Lithuania, anti - money laundering and terrorist financing requirements for such persons are described in the Article 251 of the Law.

Persons engaged in the initial offer of virtual currency (ICO) are required to identify customers and beneficiaries if the customer carries out several operations of virtual currency acquisition from an individual conducting an Initial Coin Offering (ICO) the amount whereof is equal to or exceeds 3 000 EUR, or an equivalent amount in foreign currency.

FCIS shall have the right to obtain from individuals conducting an Initial Coin Offering (ICO) the data and documents on monetary operations or virtual currency operations and transactions necessary for the performance of its functions and any other information necessary for the performance of the functions and tasks laid down in the Law.

 

OTHER OBLIGATIONS IN THE FIELD OF PREVENTION OF MONEY LAUNDERING AND/OR TERRORIST FINANCING

Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators:

  • must take measures and identify the customer and the beneficial owner as well as verify their identity before carrying out virtual currency exchange operations or transactions in virtual currency with funds amounting to 1 000 EUR or more, or the equivalent amount in foreign or virtual currency, or before depositing virtual currency to or withdrawing virtual currency from the depository virtual currency wallet in the amount equal to 1 000 EUR or more, or the equivalent amount in foreign or virtual currency, whether that transaction is carried out in a single operation or in several operations which appear to be linked (the value of the virtual currency is determined at the time the monetary operation is carried out or the transaction is concluded), except for the cases where the customer and the beneficial owner have been already identified.
  • Virtual currency exchange operators must notify the FCIS of the customer identification data and information on performed virtual currency exchange operations or transactions in virtual currency, if the value of such monetary operation or transaction amounts to 15 000 EUR or more, or an equivalent amount in foreign or virtual currency, whether the transaction is carried out in a single monetary operation or in several operations which appear to be linked.  For the purposes of this article, several linked monetary operations shall mean several daily virtual currency exchange operations or transactions in virtual currency when the total value of operations and transactions in funds amounts to 15 000 EUR or more, or an equivalent amount in foreign or virtual currency.
  • Must report to the FCIS about suspicious monetary operations or transactions:
  • Immediately upon receipt of the information that the customer intends or will attempt to carry out a suspicious monetary operation or transaction.
  • Upon establishing that their customer is carrying out a suspicious monetary operation or transaction must suspend the operation or transaction disregarding the amount of the monetary operation or transaction and, not later than within 3 working hours from the suspension of the monetary operation or transaction, report this operation or transaction to the FCIS.
  • Immediately, not later than within 1 working day from the emergence of such knowledge or suspicions, report to the FCIS if they know or suspect that property of any value is, directly or indirectly, derived from a criminal act or from involvement in such an act, also if they know or suspect that such property is used to support one or several terrorists or a terrorist organisation.
  • Must establish internal policies and internal control procedures related to:
  • Identification of the customer and of the beneficial owner and verification of their identity.
  • Risk assessment and risk management having regard to the types of identified risk.
  • Organisation of monitoring of business relationships and/or operations.
  • Implementation of international financial sanctions and restrictive measures.
  • Submission of reports and information to the FCIS.
  • Keeping of registers.
  • Storage of the information specified in the Law.
  • Updating of the information concerning the identification of the customer and of the beneficial owner.
  • Organisation of training for employees to properly familiarise them with requirements for the prevention of money laundering and/or terrorist financing.
  • Must store information for the terms specified in the Law.

 

REPORTING OF SUSPICIOUS MONETARY OPERATIONS OR TRANSACTIONS TO THE FCIS

In order to submit information to FCIS regarding virtual currency exchange operations or transactions in virtual currency, if the value of the performed monetary operation or transaction amounts to 15 000 EUR or more (Paragraph 31 of the Article 20 of the Law) or to report suspicious monetary operations or transactions (Article 16 of the Law), it is necessary to log in to the FCIS Information System and fill in a relevant notification form

Access to the FCIS Information System shall be provided by authorised employees of the FCIS Anti-Money Laundering Board, upon receipt of a notification from the obliged entity of the appointed employees and members of the Board, who would organise the implementation of the anti-money laundering and/or terrorist financing measures laid down in the Law and cooperate with the FCIS, or upon individual request in writing or by e-mail: [email protected] and [email protected]

Questions related to the submission of information or reports to the FCIS, as well as the failure of the FCIS information system, can be submitted by e-mail: [email protected] and [email protected].

 

SUPERVISION

The FCIS is responsible for supervision of the activities of Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators related to the prevention of money laundering and/or terrorist financing.

As a result of a breach of the Law, the FCIS may impose sanctions on obliged entities, including fines, as provided for in Article 36 of the Law.

The FCIS also approves instructions to Virtual Currency Exchange Operators and Depository Virtual Currency Wallet Operators aimed at preventing money laundering and/or terrorist financing and FCIS employees of the Anti-Money Laundering Board provide methodological assistance to obliged entities in the implementation of the anti-money laundering and/or terrorist financing measures laid down in the Law.

Any questions regarding the implementation of anti-money laundering and/or terrorist financing measures or requests for training session can be submitted by e-mail: [email protected].

 

RELATED LEGISLATION

Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania 

Other relevant legislation in Lithuanian language can be found here.