The Bank of Lithuania Warns Binance on Unlicensed Services

The Bank of Lithuania has issued a warning targeting Binance and its “unlicensed investment services provided in Lithuania.” The Bank did not indicate whether or not it was taking further action to compel Binance to cease any activity within Lithuania.

The central bank ordered Binance to ensure that its publicly available information is not misleading. The Bank of Lithuania has also noted that crypto-asset-related services are not regulated nor supervised, thus consumers risk losing all their investments.

The Bank said it had “assessed publicly available information” and requested Binance to ensure that its publicly available information complies with legal requirements.

The Bank said that some online crypto-asset exchange platforms enable their customers to invest in derivative financial instruments related to crypto-assets (f, contracts for difference (CFD) or crypto-assets linked to securities.

Pursuant to the Republic of Lithuania Law on Markets in Financial Instruments, such services must be licensed.

The Bank of Lithuania added that it monitors and analyses the situation and, upon noticing any unlicensed activities in Lithuania, takes measures to cease provision of such services, e.g. by blocking certain websites upon judicial authorisation.

Companies that are registered in Lithuania as virtual currency exchange operators are not supervised as financial service providers. They also have no right to provide any financial services, including investment services.

In 2019, the Bank of Lithuania posted its position on virtual assets and initial coin offerings stating that financial market participants should not participate in activities or provide services associated with virtual assets; they should also ensure separation of their activities from activities associated with virtual assets. Although financial market participants are still prohibited from receiving payments in virtual assets, the position provides for the possibility of using third-party services. Payments to a financial market participant’s account can only be made in traditional currencies, thus no additional risks are entailed.

More information is available here.

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