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European Regulation of Cryptoasset Markets (MiCA): What to expect from changes in Lithuanian legislation?

2023 in April, The MiCA regulation adopted by the European Parliament regulates crypto-assets in the European Union (EU). Its application to Tier 2 measures is delayed until 2024. This regulation aims to create a holistic regulatory framework for the European cryptocurrency market, prioritising consumer protection.

MiCA specifies that all categories of crypto-asset service providers (CASPs) will be subject to anti-money laundering requirements. Also, the regulation of MiCA will cover various crypto-assets, and there will be heavy fines for violations of the established requirements. This means that CASPs will be required to obtain a license if they want to allow, trade and store crypto-assets in the EU. This is how the EU aims to protect consumers from deception and fraud.

And what’s next? In 2023 October 6 The Financial Markets Policy Formation Advisory Commission of the Republic of Lithuania discussed how to strengthen the supervision of crypto market participants. At the Financial Markets Policymaking Advisory Commission meeting, the most attention was paid to implementing the regulation of crypto-asset markets and the supervision model of CASP. It should be noted that to implement the requirements of MiCA and the Fund Transfer Regulation (TRF), the Ministry of Finance is preparing 7 (seven) draft amendments to laws.

The meeting also discussed the earlier date of application of the MiCA regulation in Lithuania: the beginning of the application of this regulation in full in the EU – in 2024, December 30 member states may decide not to apply the transitional regime for CASP or to shorten its duration. It is important to mention that the Ministry of Finance of the Republic of Lithuania proposes that the entire licensing process in Lithuania be started earlier than the proposed deadline in the MiCA regulation.

In summary, MiCA is a comprehensive piece of EU legislation aimed at regulating crypto-assets, emphasising consumer protection and harmonisation. It imposes strict requirements on issuers and heavy fines on CASP for potential violations.

Response Legal is always ready to help you fully comply with the applicable requirements. As legal requirements are dynamic and ever-changing, our team is committed to staying up-to-date on this issue. We invite you to prepare for licensing now, as we have extensive experience working with these issues.

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Associate Mantas Benkunskas

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