Lithuania to Target Unlicensed Crypto Firms After December 31

Highlights:

• Lithuania warns crypto firms to get licenses before the end of the year.
• Only a few crypto companies have applied for the required licenses.
• Authorities say all client funds must be returned before closing services.

Lithuania has issued a clear warning to crypto service providers operating in the country. The Central Bank of Lithuania said every firm must secure a valid license by December 31. Any business without approval will operate illegally from January 1.

A transition window remains open for crypto exchanges and wallet providers already operating. Permission applications stay available until the end of this year. However, authorities see this phase as preparation time, not a reason for delays or incomplete compliance.

Lithuania Urges Crypto Firms to Obtain Licenses or Plan Closure

The Bank of Lithuania, responsible for regulating the nation’s crypto sector, has called on all service providers to obtain licenses without delay. Out of more than 370 registered firms, only around 120 are actively operating and reporting revenue. Surprisingly, less than 10%, about 30 companies, have applied for MiCA licenses so far. As a result, many active and registered firms remain at risk of regulatory action. After this deadline, Lietuvos Bankas will enforce strict measures, including fines, website restrictions, and potential criminal charges, with violations punishable by up to four years in prison.

Lietuvos Bankas asked firms unwilling to seek approval to plan a proper closure. Public notices stressed the need for orderly exits. Dalia Juškevičienė addressed operators directly, stating: “Participants of the crypto-asset services market that do not plan to continue their operations should not delay and launch active communication campaigns to ensure that all of their clients are properly and timely informed of the winding down.”

Juškevičienė emphasized that customer awareness must remain central during shutdowns. Therefore, users should receive clear timelines and guidance for fund transfers. Options should include moving fiat balances and crypto holdings to other platforms or personal wallets. Additionally, a separate notice reinforced client asset protection duties. It stated: “Operators should take all possible steps to ensure that assets belonging to their clients are returned before they are no longer authorized to provide crypto-asset-related services.” As a result, regulators expect all client assets to be returned before service termination.

Europe Cracks Down on Unlicensed Crypto Firms

Europe is now putting MiCA rules into action. These rules set clear licensing standards and protect investors. As a result, unlicensed crypto operations will no longer be allowed, putting pressure on firms to comply.

Lithuania is not alone. Latvia is also working to become a Baltic gateway to MiCA. Mārtiņš Kazāks, governor of Latvijas Banka, said the country has skilled talent, strong entrepreneurs, and a solid financial system. Therefore, Latvia has the potential to become a major European fintech hub. 

Global crypto platforms are responding quickly. KuCoin, one of the largest exchanges, recently became MiCA compliant after approval from the Austrian Financial Market Authority. Coinbase also acted four months ago, setting higher EU compliance standards with MiCA-approved whitepapers.