On-shore VASP in Lithuania
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP 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 or Custodian Virtual Currency Wallet Operator (or both, depending on services offered).
- Appoint a dedicated Anti-Money Laundering Officer (MLRO) who is a permanent resident of Lithuania.
- Implement comprehensive written internal AML/CTF rules aligned with Lithuanian AML Law and EU directives.
- Conduct a documented risk assessment of money laundering and terrorist financing risks specific to the business model.
- Establish Customer Due Diligence (CDD) procedures for identifying and verifying customers and beneficial owners, with ongoing monitoring.
- Apply Enhanced Due Diligence (EDD) for high-risk customers, PEPs, and complex/unusual transactions.
- Implement transaction monitoring systems and procedures for detecting suspicious activity.
- Report suspicious transactions and activities (SARs) to the FCIS.
- Maintain records of customer identification data and transactions for at least 8 years.
Key Restrictions
- Must be a legal entity (e.g., UAB – private limited liability company) incorporated in Lithuania with a registered office in Lithuania.
- Minimum €125,000 registered share capital required (increased from €2,500 in November 2022).
- MLRO must be a permanent resident of Lithuania; other key personnel may be required to have a strong link to Lithuania.
- Must demonstrate sufficient substance and connection to Lithuania.
- If handling fiat alongside crypto, may also require a full EMI or PI license from the Bank of Lithuania (licensing burden increases significantly).
Key Risks
- The €125,000 minimum capital requirement (introduced Nov 2022) is a significant barrier compared to the previous €2,500, catching existing operators that may have been undercapitalized.
- Dual regulatory oversight (FCIS for crypto registration, BoL for EMI/PI if fiat involved) creates layered compliance complexity.
- The distinction between pure crypto services (FCIS register) and fiat-linked services (BoL license) may create ambiguity for hybrid business models.
- Regulatory scrutiny on substance requirements is increasing; shell structures with minimal Lithuanian presence face enforcement risk.
- Tax treatment of staking, lending, yield farming, and airdrops remains subject to interpretation and could change.
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.
Bank of Lithuania (BoL): Supervises traditional financial institutions (including EMIs and PIs) and provides general guidance on financial innovation, but does not directly license crypto-native activities without fiat components.
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.
Licensing Regime (Bank of Lithuania): For Electronic Money Institutions (EMIs) and Payment Institutions (PIs), a full licensing regime is in place, involving comprehensive assessment of business plans, financial soundness, risk management, governance, and fit & proper checks, with ongoing prudential supervision.
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.
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.
Registered Office: Must have a registered office in Lithuania.
Fiat-to-Crypto / Crypto-to-Fiat Payment Processors (or traditional payment services using crypto): If the payment processor handles fiat currency (e.g., accepting fiat payments for crypto, converting crypto back to fiat and paying out to bank accounts, or issuing electronic money backed by fiat), then they would likely need a separate license from the Bank of Lithuania as either:
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- high
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a locally-incorporated VASP may operate in Lithuania by registering with the FCIS as a Virtual Currency Exchange Operator and/or Custodian Virtual Currency Wallet Operator, requiring €125,000 minimum capital, a Lithuanian-resident MLRO, a registered office in Lithuania, and comprehensive AML/CTF controls; if fiat payment services are involved, an additional EMI or PI license from the Bank of Lithuania is required.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?