Lithuanian financial regulator called for tougher oversight of the cryptocurrency sector

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Lithuanian financial regulator called for tougher oversight of the cryptocurrency sector

During a seminar on the risks and benefits of the ICO, office of investigation of financial crimes (FCIS) Lithuania urged the authorities to toughen the legislation against crimes in cyberspace, including the cryptocurrency sector. It is reported by the network of the Lithuanian edition of Delfi.

The staff of FCIS presented to the participants of the seminar entitled “the Development of the FINTECH sector: opportunities and challenges” which was held on 5 October, their views on the advantages and disadvantages of ICO.

According to a press release service, the meeting was attended by representatives of the Bank of Lithuania, Ministry of Finance, Ministry of internal Affairs, Ministry of Economics, General Prosecutor’s office, tax inspection and Department of public safety.

Governor Anthony Mikulski formulated the position of Department headed by it:

FCIS is to protect innovative technologies, however, we need control mechanisms and appropriate laws. In cryptosphere do large cash, but our concern is speculators hurrying to convert digital assets into dollars and euros.

For his part, the Deputy Director of the organization Mindaugas Petrauskas told about how existing problems can affect the economy of the country. He said:

Risks are determined by such qualities cryptocurrency as anonymity, cross-border nature of the payments, the segmentation of services (that is, different entities — exchanges, wallets, servers are in different jurisdictions) and decentralizing.

Petrauskas drew attention to the growing popularity of ICO in the country: the sector shows a growth of 305%, and this, according to the official, the highest in the world.

FCIS, Deputy Director stressed the urgency of effective legislative base. He said

You can draw an analogy with basketball. Clear rules are required by all: players, referees and fans. You can play without rules, but is that on the front lawn of a private house.

Petrauskas said that now the Ministry has been conducting strategic sector analysis of the exchange of crypto-currencies to the Euro, US dollars and other Fiat money. According to him, the staff of the service consider the data of the Central Bank of Lithuania and ministries responsible for electronic money, on legal and physical persons from 1 January 2017 carried out transactions associated with the exchange of cryptocurrencies in the amount of 80 000 euros.

Petrauskas also said that some speculators are not only high turnover, but also significant revenues. He noted that in this area there is a risk of money laundering and the activities of distributors ICO often causes suspicion:

We noticed that in the beginning of the year in Lithuania has seen a big increase. If in 2017 was 82 million euros to Lithuanian projects, ICO, now it is about 500 million euros. The question arises, how, it’s a lot of money.

FCIS connects cryptocurrencies with the risk of terrorist financing. The Europol study estimated the risk of 2.9 points out of 4. Given these problems, the Ministry of Finance and other Lithuanian authorities had submitted specific proposals on regulating the activities of developers and distributors ICO, aimed at strengthening supervision.

In April, Lithuania was one of the 22 European countries that signed the Declaration on establishing the European blockchain partnerships. Pan-European coalition was formed to “share experiences and expertise in the technological and regulatory spheres and to prepare the ground for running applications of the blockchain on the digital single market of the EU.”

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