Is Lithuania the best EU country to obtain a cryptocurrency exchange license? [Updated July, 2023]

Is Lithuania the best EU country to obtain a cryptocurrency exchange and crypto wallet license?

As one of the leading nations for FinTech in Europe, Lithuania is fast becoming the go-to country for a wide range of digital services, for businesses and important organizations worldwide. Among those services for clients in a variety of sectors is the Crypto Currency Exchange License and Crypto Wallet License, a big talking point on a global scale, offering a legal and safe environment to exchange payments securely.

Since 2020 Lithuania has developed as an integral country for a secure and seamless license set up, following the 320% Fintech growth with 230 licensed Fintechs since 2014. Now regulated by the newly appointed Financial Crime Investigation Service (FCIS), under The Ministry of the Interior of the Republic of Lithuania, the sky is the limit for not just Cryptocurrency exchange but a wealth of other FinTech services (ranked 4th globally), supporting businesses in sectors such as technology, legal and finance digitally.

After the introduction of the Law on the Prevention of Money Laundering and Terrorist Financing  (AML/CFT) ( claiming that VASPs must have a minimum share capital of no less than 125,000 euros), now there are over 400 VASPs in Lithuania.

So, what does the Baltic State offer that sets it apart from the rest of the EU? And why do virtual asset service provider (VASP) companies continue to pick Lithuania ahead of other leading nations such as Malta and Estonia that also provide support to obtain a Cryptocurrency Exchange License?

Why FinTech’s Select Lithuania as Their Destination for the License

The answer is simple– efficiency, transparency and reliability. Vilnius, the capital of Lithuania, is a rapidly growing tech hub for not just exciting start-ups based in Lithuania but also acting as a financial standpoint for remote businesses from important Asian, American, and European markets. This is because they reacted quickly to other countries setting even stricter regulations, making it more difficult for Fintechs to set up a Crypto Exchange License, whereas Lithuania has created a financial ecosystem that welcomes new startups with a smooth transition. That’s why Lithuania now has a presence from huge companies such as Google and IBM, while even incorporating impressive Fintechs such as Binance, Kraken, Blockchain.com.

Now we’re seeing a shift as more organizations search for Lithuania. Why? Because of the below reasons:

• Costs are lower than other major European countries
• A faster process with licenses taking a matter of weeks instead of months
• Getting a license from Lithuania doesn’t have to be complicated or time-consuming – it can be completed remotely anywhere globally
• The country has a wide range of tax incentives (such as 5%) Low corporation tax rates

Something to keep in mind

After the amendments to the AML Law, stricter requirements were also established for the management of the operators. Here’s what your company should keep in mind when setting up in Lithuania:

• The management of operators (CEO, board members, etc.) cannot work in multiple legal entities that provide VASP services (with exceptions applying in cases where the companies belong to the same group).

Essentially, this aims to set higher standards for the management of these companies, like those applied to other licensed or regulated financial market participants.

• The operator must have at least one senior manager who is a permanent resident of Lithuania. In practice, this senior manager is usually the AML officer (MLRO), i.e., a specialist responsible for organizing the implementation of anti-money laundering measures in the company. Larger companies typically have more than one such officer, while in the case of start-ups, this function is usually performed by a single individual.

The regulations that recently came in action ensure that Lithuania is not only an easy but also a safe choice for setting up your VASP, making it the perfect choice.

If you are interested in obtaining a crypto exchange license in Lithuania but have questions, BCCS Cluster has 4 years of experience working with crypto and compliance. Let’s talk!

How Do You Get Get a Cryptocurrency Exchange License in Lithuania?

Countries such as Estonia, once recognized as a popular destination for obtaining a Cryptocurrency Exchange License, have gradually become more of a difficulty. Now the Estonian banking system is imposing more laws to prevent foreign investors from operating that do not use typical local market goods and services within the Northern European country.  

At the time of writing, Lithuania provides two types of Cryptocurrency activity authorization for virtual currency operations, discussed in more details below and directly evident on the official:

• Cryptocurrency Wallet Service(Depository / Custodian virtual currency wallet operator) – transfer, manage, and protect cryptocurrency exchanges using encrypted keys for a third party or your business.

The depository / custodian virtual currency wallet operator refers to 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 depository / custodian virtual currency wallets on behalf of the customers.

• Cryptocurrency Exchange Operator (Virtual currency exchange operator) – Services to exchange cryptocurrency, fiat to cryptocurrency, or vice versa.

The exchange operator applies to 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 virtual currency exchange, purchase and/or sale for remuneration.

You can obtain both cryptocurrency exchange licenses in Lithuania. The minimum time before completion is roughly a minimum of one month.

The activity of Virtual currency exchange operators and (or) depository/custodian virtual currency wallet operators is not licensed in Lithuania; however, there are mandatory requirements foreseen in the Law:

• VASPs must inform the Register of Legal Entities within 5 business days from starting or ending their activity, certifying compliance with money laundering and terrorist financing prevention laws.
• VASPs must have a senior manager who is a permanent resident of Lithuania.
• If a company in Lithuania is a public or private limited liability company and wants to be a VASP operator, they need at least 125,000 EUR in registered authorized capital.
  But if the company has a different legal form or is a branch of a company from the European Union or another foreign country, they must have a guarantee from an insurance company for at least EUR 100,000 per customer claim and EUR 500,000 for all customers’ claims.
• VASPs have to choose senior employees to handle the money laundering and terrorist financing prevention measures and work with the Financial Crime Investigation Service (FCIS).
• The people in charge of VASPs cannot work for more than one of these operators at the same time, except if those operators are part of the same group of companies.
• VASPs cannot offer services in another country in a way that leaves only non-essential functions in Lithuania, especially if they provide services exclusively to customers in that other country or stop their activities in Lithuania altogether.
• A person cannot be a member of the management and supervisory bodies or beneficiary of a VASP if they have been found guilty of serious or very serious crimes, minor or less serious crimes against property, or any other offenses, with certain time restrictions after their conviction.
• If a customer does multiple monetary operations within 24 hours that seem connected, they must be identified right after it’s established that those operations are linked.
  These linked operations include virtual currency exchanges or transactions amounting to EUR 700 or more, as well as deposits or withdrawals of virtual currency from the virtual currency wallet with the same value or more, either in foreign or virtual currency.

Something to keep in mind 

Starting from January 1, 2025, VASPs are required to notify the FCIS of customer identification data and details of virtual currency exchange operations or transactions valued at EUR 15,000 or more, whether they are individual transactions or connected daily transactions reaching this total value.

Additionally, these operators must collect, store, and share specific information with the Virtual currency exchange operator, Depository virtual currency wallet operator, or the recipient’s financial institution to identify suspicious monetary transactions and take necessary actions during virtual currency exchanges, transfers, or other transactions.

When in Lithuania, the main setup is managed once you:

1. Arrange the necessary initial company documents for the company’s incorporation;
2. Establishment of UAB (limited liability company), which included the requirement to have a legal address (Virtual or non-virtual);
3. Arrange the necessary AML/CFT, KYC documents;
4. Start the process of locating and appointing a permanent resident of Lithuania AML Officer (MLRO);
5. Notify FIU about the designated AML officer (MLRO).

Currently the practice reveals that Lithuanian banks do not show friendship with cryptocurrency exchanges in the field of bank account opening, therefore for our clients we suggest services at an EMI (Electronic Money Institution), where companies holding both the crypto exchange and wallet licenses (or one of specified activity) successfully could open an EMI account. It is important to note that this should be completed before the start of the real activity, i.e. once the company is incorporated and the starting account should be converted into an operational account. In almost all cases, the company is incorporated and after the registration the VASP activity is adjusted to the activities of virtual currency exchange operators and/or depository virtual currency wallet operators in the Register of Legal Entities,”  Ieva Strunkienė, Senior Associate at CEE Attorneys.

Lithuania – the Safe, Reliable, and Efficient Option

It may be one of the smallest nations in Europe, but Lithuania is officially on the map for Fintech’s because of its welcoming environment and intelligent processes in place for businesses of all sizes to operate. For a quick and easy Crypto Currency Exchange License set up, since 2020 Lithuania has demonstrated it’s the new kid on the block that’s quickly taken over from established players such as Estonia or Malta for those initial first steps. Rest assured the new regulations are in place to ensure it’s a fair and secure process, earning its name as a safe and reliable option.

Contact us

Reach us at https://bccs.tech/contact-us/ to learn more on why Lithuania is the next Hot-Spot for Cryptocurrency companies.