Lithuania to clarify its position on ICOs and cryptocurrency

The Board of the Bank of Lithuania views initial coin offerings, when a company decides to attract investors by selling digital tokens, as a risky business. This is explicitly mentioned in the latest statement published on the official website of Lithuania’s main financial regulator. According to the document, the government of Lithuania plans to regulate ICOs, approaching each one individually, as the authorities are aware that ICOs can vary greatly. The authors of the document explain the decision in detail:

“For example, when coins have features of securities, a prospectus, approved by the regulator, should be drawn up and they should be subject to other requirements of the Law on Securities. Depending on the nature of offering, legal acts regulating crowdfunding, collective investment, and provision of investment services, the secondary market or the formation of a financial market participant’s capital would similarly be applied.”

And here is the bad news: the services defined in the Law of Financial Institutions and insurance activities specified in the corresponding law should not participate in activities connected with “virtual currencies” and they should always separate fiat from crypto, the document tells. Such an advice might come from the volatility of the crypto market – in other words, the government of Lithuania might be afraid that some companies would invest huge sums or assets in crypto market, then it could go down and the country’s economy could suffer.

All in all, “should” doesn’t mean “must”, and the position might change in the future once the cryptocurrency market becomes more mature.