Criteria for Regulation of Crypto Business in Lithuania
More and more entrepreneurs are starting to think about opening a crypto business. It is mainly because interest in this industry is growing tremendously, and most civilized countries have already managed to develop systems for regulating this. A crypto exchange license in Lithuania is a good choice for those who want to work in the EU within the law. Obtaining this work permit has several benefits, but the most important is the increase in trust from clients.
How does Lithuania feel about the crypto industry?
The modern world is divided into 3 large parts:
1. Those who support the development of the crypto industry;
2. Those who are categorically against it;
3. And those who do not yet fully understand the significance of this phenomenon in the world community.
Lithuania certainly belongs to the first category. It was one first to develop a system to regulate (not just ban) the crypto business. Of course, there is still work to be done here because not all aspects of the activity of this industry have been touched upon, but all decisions are made logically and consistently. It allows the legislative framework on this issue to develop harmoniously.
Another point worth discussing is the attitude towards small and medium-sized businesses. The country’s government is trying to do everything to make it work stably and develop. The standard tax rate for crypto-currency companies is 15% (exchange of currencies is not subject to VAT), and small organizations employing no more than 10 people must pay a tax ranging from 0 to 5% of profits. It is a big difference and an excellent gift for people just starting their business journey.
How can a crypto business operate legally?
To work calmly and not have problems with the law, you need to obtain a crypto exchange license in Lithuania.
Some of the most important benefits of obtaining a work permit include:
- Opportunity to work without fear of problems with the law;
- Ability to solve problems in the legal field;
- Increasing the level of trust on the part of clients;
- An increase in the number of clients;
- Opportunity to cooperate with national banks and much more.
Some exchange owners want to remain in the shadows, evading taxes and government regulation. It leads to the fact that the crypto business is associated with fraud and the criminal world by many ordinary people.
The thing is that there are exchanges that want to offer their users acting anonymously. It is worth noting that such a function is of interest to criminal elements and several other users who do not want their transactions to be tracked. Otherwise, they could use the services of an ordinary bank.
One of the requirements for crypto exchanges that the regulatory authority puts forward is verifying client data and the ability to provide information about user transactions. According to the authorities, this allows you to catch crypto criminals (which certainly exist) quickly. But this principle of operation becomes contrary to the main idea of creating cryptocurrencies.
After obtaining a license, each company must regularly provide a report on its activities. If you do it at the wrong time and make mistakes, this may be why the system will revoke the license.
Also, FCIS may do this if it notices your association with criminal elements or fraudulent activities. If a disgruntled client contacts the regulatory authorities and provides evidence of your illegal activities, you can immediately lose your license. It is one of the reasons why all disputes must be resolved in favor of the client; otherwise, you can lose much more. Even the most miniature scandal can lead to a loss of trust in you from other customers. Like any other type of activity, the cryptocurrency business is highly dependent on public opinion and the reputation of the company.
How to get a work permit?
Getting a crypto license has never been easier than today. You must register a company, collect several documents and apply to regulatory authorities.
Your company must meet the following requirements:
- Employed by at least 2 people;
- There is a person on staff with experience in the security system who will create reports for regulators;
- The website must be registered in Lithuania;
- Have a bank account.
But the most important criterion for obtaining a crypto exchange license in Lithuania is the reputation of the founder and all company members. Regulatory authorities are asked to provide resumes of all employees and certificates of non-conviction. If a person in your state has previously been convicted of fraud or tax evasion, you will not receive a work permit.
As you can see, if you plan to work honestly and openly, these requirements cannot scare you. It is a state of law where a person’s desire to develop in professional activities is respected (if this is not related to a violation of the law).
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