Will the Participants of the Cryptoasset Market Also Pay the Solidarity Tax?

As you know, on 14/03/2024, the Finance Ministry of Lithuania together with the Bank of Lithuania prepared and submitted for re-coordination with other institutions a dozen drafts of amendments to the laws, which will establish new operational requirements for crypto-asset service providers and consolidate their licensing process.

The draft law amending the Law on the Bank of Lithuania foresees new annual contributions to cover the costs of financial market supervision, which should be paid and licensed by the participants of the cryptoasset market. It is proposed to establish an annual contribution of 0.7 percent for certain entities, calculated from the received annual income of the company, but in all cases not less than EUR 3,000. The contribution ceiling is not set.

The annual income of some players operating in the market reaches hundreds of millions of euros, so it is likely that the participants of the cryptoasset market would have to allocate significant reserves to cover such annual payments. Risk, activity potential and scale – the reasons indicated in the explanatory note of the law amendment projects, justifying the setting of premiums of this size for market participants. But are such unlimited additional regulatory costs really reasonable and proportionate to achieve the specified goals? Maybe the goal is to introduce a new solidarity tax?

Commentary by Ieva Bakutienė, Associate Partner | Licensing Services