Centralized exchange in Lithuania
Order-book exchange that takes custody of user assets and matches trades between users.
CEX is conditionally permitted in Lithuania with a local entity, subject to AML obligations and medium licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- Medium
- Last updated
- 2026-07-13
AML Obligations
- Registration with the Financial Crime Investigation Service (FCIS) as a Virtual Currency Exchange Operator and/or Custodian Virtual Currency Wallet Operator.
- Minimum €125,000 registered share capital required (increased from €2,500 in November 2022).
- Comprehensive internal AML/CTF written policies aligned with Lithuanian AML Law and EU directives.
- Documented risk assessment of money laundering and terrorist financing risks specific to the business model.
- Customer Due Diligence (CDD) procedures including identification/verification of customers, beneficial owners (UBOs), and ongoing monitoring.
- Enhanced Due Diligence (EDD) for high-risk customers, PEPs, or complex/unusual transactions.
- Transaction monitoring systems and procedures for suspicious activity detection.
- Obligation to report suspicious transactions and activities (SARs) to the FCIS.
- Record-keeping of customer identification data and transactions for at least 8 years.
- Appointment of a dedicated, qualified MLRO who must be a permanent resident of Lithuania.
- Staff training obligations on AML/CTF procedures.
- Travel Rule obligations: must comply with EU wire transfer regulations for virtual asset transfers; the FCIS requires Crypto Asset Service Providers to implement travel rule compliance (obtaining, maintaining, and transmitting originator and beneficiary information) for all transfers.
Key Restrictions
- Must be incorporated as a legal entity (e.g., UAB – private limited liability company) in Lithuania with a registered office in Lithuania.
- Minimum €125,000 registered share capital required for both virtual currency exchange and custodian wallet operators.
- The MLRO must be a permanent resident of Lithuania.
- Key personnel (e.g., CEO, board members) may be required to demonstrate a strong link to Lithuania and sufficient substance in the jurisdiction.
- Custody of user assets: registered operators must follow segregation and safeguarding rules; user funds (fiat) must be held in segregated client accounts, and crypto assets must be safeguarded from the operator's own assets (bankruptcy-remote).
- Cannot offer fiat-based payment services (e.g., electronic money issuance, fiat payment processing) without a separate EMI or PI license from the Bank of Lithuania.
Key Risks
- FCIS registration is not a 'full license' — it can be more easily revoked or suspended if compliance is found inadequate, creating operational uncertainty.
- The €125,000 minimum capital may be a barrier for smaller entrants but is moderate relative to full EMI/PI licensing.
- Lithuania has tightened crypto regulation significantly since 2022/2023 (higher capital, substance requirements) and further EU-level regulation (MiCA) may impose additional obligations or cause regulatory shifts.
- Travel rule compliance is technically complex for a centralized exchange; failure to implement compliant VASP-to-VASP data transmission could lead to enforcement.
- Regulatory scrutiny on crypto-to-crypto transfers and wallet services is evolving; unclear boundaries between exchange/wallet operator definitions may create scope risks.
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Key Regulator: The Financial Crime Investigation Service (FCIS) is the main supervisory body for virtual currency exchange operators and custodian virtual currency wallet operators.
Virtual Currency Exchange Operator:
Definition: Any natural or legal person that provides services of exchanging virtual currency to fiat currency or vice versa, or virtual currency to another virtual currency, or transfers virtual currencies. This covers most common crypto exchanges.
Custodian Virtual Currency Wallet Operator:
Registration Regime (FCIS): For virtual currency exchange and custodian wallet operators, Lithuania operates a registration model. This means that once an applicant meets the specified criteria (primarily AML/CTF related) and submits the required documentation, they are registered and allowed to operate. It is generally a less intensive process than obtaining a full financial services license.
Legal Entity: The applicant must be a legal entity (e.g., UAB – private limited liability company) incorporated in Lithuania.
A minimum €125,000 registered share capital is required for both virtual currency exchange operators and custodian virtual currency wallet operators. This requirement was significantly increased in November 2022 from a previous €2,500.
AML/KYC Requirements: Robust internal procedures are paramount:
Internal AML/CTF Rules: Comprehensive written policies and procedures aligned with Lithuanian AML Law and EU directives.
Risk Assessment: A documented assessment of money laundering and terrorist financing risks specific to the business model.
Customer Due Diligence (CDD): Procedures for identifying and verifying customers (individuals and legal entities), beneficial owners (UBOs), and understanding the purpose and nature of business relationships. This includes ongoing monitoring.
Enhanced Due Diligence (EDD): For high-risk customers, politically exposed persons (PEPs), or complex/unusual transactions.
Transaction Monitoring: Systems and procedures to monitor transactions for suspicious activities.
Reporting: Obligation to report suspicious transactions and activities (SARs) to the FCIS.
Record Keeping: Maintaining records of customer identification data and transactions for at least 8 years.
Registered Office: Must have a registered office in Lithuania.
AML Officer (MLRO): A dedicated, qualified Anti-Money Laundering Officer (MLRO) must be appointed. This individual must be a permanent resident of Lithuania. They are responsible for implementing AML/CTF procedures, training staff, and reporting to the FCIS.
Management/Board: While not all board members need to be Lithuanian residents, the company must demonstrate sufficient substance and connection to Lithuania, and the FCIS may require certain key personnel (e.g., CEO, board members) to have a strong link to the country.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a centralized exchange may operate as a registered Virtual Currency Exchange Operator under FCIS supervision, requiring a Lithuanian legal entity, €125,000 minimum capital, MLRO who is a Lithuanian resident, comprehensive AML programme, travel-rule compliance, and segregation of user assets; fiat-related payment services would require a separate Bank of Lithuania EMI/PI license.
Questions this verdict aims to answer
- What exchange / VASP license applies?
- What custody segregation rules apply to user assets?
- What market-conduct and listing rules apply?
- What travel-rule obligations apply on withdrawals?