As known to our clients, Inlock Services UAB was established on the 31st of March 2022 in Lithuania as a virtual asset service provider and the activities it performs that are subject to registration were also recorded:

  • Crypto Wallet Service – which means sending and receiving, managing and protecting cryptocurrencies using encrypted keys for a third party or business.
  • Cryptocurrency Exchange Service – which includes services related to buying and/or selling cryptocurrencies as well as exchanging crypto to crypto.

This summer, the Lithuanian Parliament approved amendments to its national law on the prevention of money laundering and terrorist financing. These changes were made to harmonise the international legal environment and also to implement the FATF (Financial Action Task Force) guidelines. The amendments cover various matters.

Changes in the Enforcement of Customer Due Diligence Measures

Virtual Asset Service Providers are required to apply customer due diligence whenever a client performs transaction(s) of €700 or more in a 24-hour period.  The previous regulation set a threshold of €1000 for identifying the client and the beneficial owner, but this value has been reduced now.

It is also prohibited to open anonymous account(s) for clients. The obligation for identification will be effective from the 1st of January 2023 and the ban on anonymous account(s) from the 1st of November 2022.

Inlock has always complied with the above conditions, as without the identification of the client or the beneficial owner, it is not possible to make a deposit on the platform, regardless of the limit.

The Travel Rule

The Financial Action Task Force (FATF) made a recommendation in June 2019 to extend the “Travel Rule” requirement to virtual asset service providers. This requires VASPs to collect and retain data (including personal data) of the initiator and recipient of the transaction. This data must be sent immediately and securely to the recipient VASP or financial institution. The new regulatory modifications will apply from 2025.

Requirements for Licensing the Virtual Asset Service Providers

The new standard requires VASPs to have a minimum capital of €125 000. This requirement is aligned with the minimum capital criteria set out in the draft MiCA Regulation and can be seen as a precursor to it.

As an additional requirement, an individual citizen of Lithuania must be employed locally who will be responsible for the implementation of measures to prevent money laundering and terrorist financing.

The requirements stated above are all fulfilled by Inlock Services UAB, the operator of the Inlock platform, and we continue to prioritize preparing for compliance with the EU MiCA Regulation.