The Republic of Lithuania is working on streamlining regulations regarding the cryptocurrency market for local traders, particularly for initial coin offerings (ICOs).
A document that was published on Friday revealed that the country?s Ministry of Finance has been working on a framework through which it plans on providing guidance and regulations pertaining to the ICO market. The document makes Lithuania one of the first countries in the European Union to offer some sort of clarity on matters related to ICO projects including the sale of digital tokens.
Some of the other European companies that have also gone down the same road include France and Estonia. The Lithuanian government hopes that the guidelines will provide a positive picture of how the country treats businesses that plan on raising funds through ICOs. It is also part of the government?s plan to attract more investors.
?We should make our efforts for Lithuania to become the main headquarters for those ICO project promoters which are willing to operate in a transparent and orderly legal environment,? stated Vilius Sapoka, Lithuania?s Minister of Finance.
The key focal points of the guidelines
The new guidelines will reportedly focus on issues such as indirect taxation, corporate taxation,anti-money laundering, corporate and other regulatory issues involving ICOs. The guidelines also provide detailed descriptions of the types of tokens that will be considered as securities. The latter has particularly been a big issue that has popped up whenever there are talks about regulatory issues. Digital currencies issued through ICOs are usually categorized as securities.
The guidelines in the document also provide the way forward on how the companies raising funds through ICOs will be taxed and other forms of financial regulations that will be involved especially if a token gains governance and token rights. ICOs have rapidly become the most preferred form of raising capital, especially for blockchain companies. However, they have also paved ways for scams through which a lot of investors have lost their money, thus the need to make sure that the whole process is regulated and streamlined.
Sapoka stated that the development of new financial instrument and blockchain technology cannot be ignored and thus the need for a form of regulation. He also acknowledged that the crypto market is here to stay, thus the need to tap into the opportunities.
Disclaimer: Nothing in this article should be construed as financial advice in any way, nor as an encouragement to engage in cryptocurrency trading activity. This article was not sponsored by any entities or companies mentioned in the article. The only purpose of this article is to inform/educate on the topics discussed in the article.
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