MiCA, the European Crypto-Assets Regulation, is set to harmonize crypto regulations and crypto licensing across the EU/EEA. Some countries have already issued their own national authorizations for Virtual Asset Service Providers (VASP), primarily on a national level in Europe.
Varieties of Authorization for Virtual Asset Service Providers
Common VASP Authorization Types:
- Exchange operator for fiat-crypto, crypto-fiat, and crypto-crypto transactions.
- Operator for virtual asset custody and client wallet management.
Authorization requirements vary by country, with some also mandating approval for primary market virtual asset issuance (e.g., ICOs, IEOs). EU/EEA VASP-compliant companies are overseen by national AML authorities and financial regulators.
Key Considerations When Selecting a European VASP Jurisdiction:
- Company incorporation and capital requirements
- Local presence and appointment of a local AML officer/MLRO
- Access to bank/EMI accounts
- Client onboarding, KYC, and AML reporting obligations
- Regulatory reporting and operational expenses
For instance, Poland’s appeal lies in its absence of additional capital requirements, while Lithuania offers numerous licensed crypto-friendly financial institutions for seamless banking services to crypto firms.
Lithuania: A Cost-Effective Crypto Hub
Lithuania, known for its strong financial sector, is now a preferred destination for European crypto businesses due to its transparent and cost-effective Virtual Asset Service Provider (VASP) authorization.
Key Points:
Binance’s Presence: In 2020, Binance, the world’s largest crypto exchange, obtained Lithuanian crypto exchange and wallet authorization. Lithuania’s VASP regulations are among the EU’s most favorable, enabling seamless crypto asset services across Europe. Lithuania’s straightforward licensing process, speed, and regulatory cooperation make it a compelling choice.
Supervision: The Lithuanian Financial Crime Investigation Service (FNTT) oversees cryptocurrency exchange and wallet operators.
Cross-Border Expansion: Lithuanian VASP-authorized firms can secure additional authorizations in major European countries like Germany, Italy, France, and Spain under the same Lithuanian entity, reducing costs.
Expanding Crypto Opportunities in Lithuania
Lithuania’s virtual assets authorization goes beyond traditional Crypto Currency Exchange and Crypto Currency Depository Wallet Operator licenses to include Virtual Coin and Exchange Offering (ICO/IEO) for investor token distribution. This involves separate AML/KYC and reporting requirements for companies engaged in ICO/IEO activities. Lithuanian-registered companies can also register and publicly distribute virtual coins to investors in the EU/EEA. Moreover, the incorporation and VASP authorization process in Lithuania is streamlined and can be completed quickly, even without the physical presence of company shareholders and directors in the country.
Why Rely on a Team of Experts?
Prifinance stands as a top authority in the realms of blockchain technology and cryptocurrencies. Partnering with us ensures your smooth journey in acquiring a cryptocurrency exchange license and constructing a profitable business framework tailored to market demands.
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