FNTT Intensifies Oversight of VASPs in Lithuania: A Guide to Ensuring Compliance

As Lithuania’s Financial Crime Investigation Service (FNTT) continues to expand its regulatory oversight of virtual-asset service providers (VASPs), it’s crucial for businesses operating in the cryptocurrency sector to ensure their operations align with the evolving legal framework. With the transitional period for VASP licensing extended until the end of 2025, there is a clear message: compliance is not optional.

In this article, we’ll explore the key regulatory requirements being enforced by FNTT, highlight the potential consequences of non-compliance, and provide a roadmap to ensure your business is fully prepared for the scrutiny ahead. Additionally, we will discuss how NOEWE Legal & Tax can assist in navigating these regulatory challenges with tailored AML/CTF compliance services.

FNTT’s enhanced oversight: what VASPs need to know

The Lithuanian FNTT has announced that it will continue its active and enhanced supervision of VASPs until the end of 2025. The primary aim is to ensure that crypto-related businesses comply with anti-money laundering (AML) and counter-terrorist financing (CTF) including sanctions compliance laws, along with other regulatory requirements that affect the crypto sector.

KEY AREAS OF FOCUS:

1. SCHEDULED AND UNSCHEDULED INSPECTIONS
   FNTT will conduct both planned and unplanned inspections to ensure that VASPs meet compliance standards. These inspections will focus on evaluating the internal control systems, risk management strategies and AML/CTF compliance practices of VASPs.
2. TIMELY AND ACCURATE DATA REPORTING
   VASPs are required to submit timely and accurate data to FNTT, providing transparency about their activities. Any delays or inaccuracies in reporting can result in penalties or fines and may raise suspicion regarding the company’s operations.
3. AML/CTF COMPLIANCE
   Effective AML/CTF compliance controls are essential to preventing illegal activities such as money laundering and terrorist financing. VASPs must establish comprehensive risk management systems that assess the risks associated with clients, transactions, jurisdictions and other business activities. This includes implementing robust AML/CTF compliance program that is not only well-documented, but also fully operational and effective in practice.
4. STRIX AML QUESTIONNAIRE
   FNTT requires VASPs to complete the Strix AML questionnaire, a key tool for assessing compliance with AML/CTF regulations. This questionnaire helps ensure that companies are fully aware of their obligations and have appropriate measures in place to detect and prevent illicit activities.

Why non-compliance could be costly

Failure to adhere to these regulatory requirements can lead to severe consequences for VASPs, including:

• Fines and penalties: non-compliant businesses can be hit with hefty fines, which could significantly affect their financial standing.
• Suspension of the operations: restrictive supervisory measures may significantly limit a VASP’s operations, including suspending activities such as client onboarding, transaction processing or service provision until compliance issues are addressed.
• Suspension from the public registry: VASPs may be suspended from the public registry, which effectively prohibits them from operating legally in Lithuania and may result in the closure of their operations..

For VASPs operating in Lithuania, these risks are not something to be taken lightly. Ensuring full compliance with FNTT’s expectations is essential to maintaining business operations and reputation in the crypto space.

How NOEWE Legal & Tax can help your VASP stay compliant

Navigating the complexities of AML/CTF compliance and staying ahead of regulatory changes can be challenging, especially in the fast-evolving crypto industry. That’s where NOEWE Legal & Tax can help.

Our AML/CTF compliance services are designed to support crypto businesses in ensuring they meet all regulatory requirements set by FNTT and other relevant authorities. With a deep understanding of Lithuania’s crypto regulations, we provide expert guidance to VASPs seeking to navigate the compliance landscape and prepare for upcoming inspections.

OUR COMPLIANCE SERVICES INCLUDE:

• AML/CTF Program Development: we assist businesses in developing and implementing robust AML/CTF frameworks that adhere to regulatory standards and best practices.
• AML/CTF/Sanctions Risk Management Systems: our experts help build effective risk management systems to detect and mitigate potential risks, ensuring that your business remains compliant.
• Strix AML Questionnaire Assistance: NOEWE Legal & Tax provides support in completing the Strix AML questionnaire, a critical component for demonstrating your company’s compliance with AML regulations.
• Compliance Audits: we conduct thorough compliance audits to identify potential gaps in your AML/CTF procedures and offer solutions to ensure full compliance.
• Support throughout inspections: we provide active support to clients during regulatory inspections (planned or unplanned) by ensuring their AML/CTF frameworks are not only compliant but also effectively implemented in practice.

Contact us today to ensure your business is fully compliant and inspection-ready!

As regulatory scrutiny intensifies in Lithuania, AML/CTF compliance is more important than ever for VASPs. With the extended licensing deadline, now is the time to ensure your AML/CTF compliance program is up to standard.
Rita Tamulytė, AML/CTF expert at NOEWE Legal & Tax, provides the expertise and support your business needs to stay fully aligned with evolving regulatory expectations.