Lithuania Cracks Down: Unlicensed Crypto Service Providers Face Legal Reckoning

Lithuania's financial watchdog draws a line in the sand for crypto operators.

The Regulatory Hammer Drops

No more gray areas. The Bank of Lithuania, through its Financial Supervisory Authority (FSA), is putting unregistered cryptocurrency platforms on notice. The message is blunt: comply or face escalating consequences. This isn't a gentle nudge toward registration—it's a clear ultimatum for an industry that has often operated in regulatory shadows.

Playing by the Rules or Paying the Price

The FSA's move signals a decisive shift from guidance to enforcement. The regulator is scrutinizing entities offering exchange and custody services without the necessary licenses. The potential fallout isn't just theoretical; it includes hefty fines, operational shutdowns, and legal action. For platforms serving Lithuanian users, the freewheeling days are officially over.

A Signal to the Broader Market

Lithuania's stance reflects a wider European trend of tightening crypto oversight. As MiCA regulations loom, national authorities are proactively asserting control. This crackdown serves a dual purpose: protecting consumers and forcing the industry to mature. It separates serious, compliant builders from fly-by-night operators—a necessary purge for long-term credibility.

One cynical finance veteran might quip that nothing makes traditional regulators move faster than the sight of people making money without their permission. Lithuania's warning shot proves that when it comes to crypto, the era of asking nicely is over. Enforcement is here.

Lithuania sets deadline for crypto companies’ compliance with MiCA

All entities providing crypto-related services in Lithuania are obliged to have a license, and the monetary authority in Vilnius has urged them not to wait until the very last moment to apply for one.

A transitional period, allowing businesses active in the space, such as cryptocurrency exchange and wallet operators, to secure the necessary authorization, expires at the end of 2025.

The Central Bank of Lithuania (CBL) recently reminded participants in the market that this is not merely a recommendation, but a mandatory requirement, regional media noted this week.

The licensing regime was introduced through legislation transposing the European Union’s Markets in crypto Assets (MiCA) regulation into national law.

After the December 31 deadline, measures will be taken against those that continue to work unlicensed, including fines, blocking of websites and even criminal prosecution, the leading Russian crypto news outlet Bits.media detailed in a report on Wednesday.

In a notice, Lietuvos Bankas called on platforms that do not intend to file license applications to take steps to ensure they terminate their activities smoothly.

Dalia Juškevičienė, head of the CBL’s Investment Services and Undertakings Supervision Division suggested:

“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.”

She insisted users should be well-informed on the timeframe of the process and receive detailed instructions on how to transfer their fiat funds and cryptocurrency holdings elsewhere.

The executive added that customers must also be offered an option to exchange their digital coins and have the money transferred to a custodian of their choice or self-hosted wallets. The press release emphasized:

“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.”

Failure to comply with regulations may result in criminal liability

Onboarding new users and accepting crypto assets as well as the continued provision of related services without a MiCA license will be deemed to constitute illegal financial activities from January 1, stressed the Central Bank of Lithuania.

The regulator also warned that under the country’s criminal code, these are punishable by way of fines and even imprisonment for up to four years.

Furthermore, Lietuvos Bankas remarked it’s empowered to restrict access to the websites of companies suspected of providing financial services outside the law.

The monetary authority maintains a database of such entities and notifies relevant law enforcement agencies about any potentially criminal activities in the industry.

Less than 10% of all Lithuanian crypto businesses have applied for license

Only about 30 organizations have so far applied for a license to operate in the cryptocurrency sector from the CBL, the announcement revealed.

That’s out of more than 370 entities officially registered as crypto service providers, although only about 120 of them are actually active and reporting revenues.

The Bank of Lithuania highlighted it has issued a special guidance for all these operators on the upcoming changes to “protect the interests of investors and ensure the transparency and integrity of the crypto-asset market.”

Lithuania has been trying to establish itself as one of the EU member states serving as MiCA gateways for crypto businesses from around the world.

The Baltic nation was recently listed among the top three jurisdictions in the 2025 World Crypto Rankings report produced by crypto exchange Bybit.

Its northern neighbor, Latvia, is another representative of the region with similar aspirations. Earlier in December, the country unveiled that the annual turnover in its fintech sector now reaches €400 million, as reported by Cryptopolitan.

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