LITHUANIA Law and Practice Contributed by: Tadas Kuzminskas, APB “Leagus”
ments. These features require privacy‑by‑design measures to uphold principles and rights, such as the storage‑limitation principle and data‑subject rights like the right to rectification and the right to be for- gotten. Therefore, a data controller should carefully assess any blockchain solution it intends to use to avoid non‑compliance risks and specific threats to data subjects’ rights and freedoms. 1.1.4 Smart Contracts Smart contracts can be enforced in Lithuania, but enforceability depends on meeting general contract- law and sector-specific requirements. In particular: • parties must have capacity to enter into an agree- ment; • the smart contract must satisfy Lithuanian rules on contract formation (offer and acceptance/consent); and • a contract is valid if there is agreement between the parties and, where the law so requires, the prescribed form (eg, notarisation or written form) is observed. These formalities must be complied with. For exam- ple, purely self‑executing on‑chain script will not meet a statutory requirement for a notarised or otherwise specific form. 1.1.5 Industry and Trade Bodies There are no self-regulatory organisations or trade associations that represent the blockchain industry in Lithuania, but see 1.2.6 Industry and Trade Bodies for discussion of trade bodies in relation to crypto. 1.2 Crypto-Assets 1.2.1 Property Considerations There is no bespoke crypto‑asset property regime in Lithuania, but crypto‑assets are treated as intangi- ble assets. Tax guidance treats crypto as short‑term assets. Enforcement of property rights differs from tangible assets because control depends on cryp- tographic keys, custody arrangements and technical access. On‑chain transactions and ledger records are admissible and useful evidence, but courts may require corroborating off‑chain documentation (con- tracts, account records, key‑control evidence). Where crypto is held by a custodian/crypto-asset service
provider (CASP), enforcement should proceed against that custodian to compel transfer, freeze balances or recognise proprietary claims according to the custody agreement. Transfer of ownership in crypto‑assets in Lithuania is determined by applicable civil law principles – primar- ily by the parties’ agreement and by who has control of the asset (practical possession/control of private keys or custodial account). Parties may effect a trans- fer of crypto‑assets by entering into a title‑transfer agreement. Where crypto is held by a custodian, a transfer between custodial accounts may suffice. If crypto‑assets are legally characterised as securities or e‑money, additional formalities or steps may be required. Under the Civil Code of the Republic of Lithuania, the object of a pledge may be any existing or future mov- able property and proprietary rights. Creating pledges over crypto‑assets is possible in principle and is similar to creating a pledge over securities. However, unlike securities, crypto-assets are harder to identify and immobilise. An effective security interest requires clear identification of the collateral and reliable evidence of the creditor’s security interest (control of private keys or custodial account entries). Where assets are held by a custodian, notifying and recording the pledge with the custodian (as with securities) helps restrict disposal and creates clear title evidence. Self‑custody or custody in services without pledge‑capable records makes enforcement and priority uncertain. Mandatory requirements for pledges (eg, the required content and form of the pledge agreement) must also be complied with at all times. 1.2.2 Access to Banking Lithuanian law does not list prohibited partner types for CASPs. However, firms providing crypto-asset ser- vices can be restricted from using certain partners if they pose AML/CFT, prudential, reputational, sanc- tions or operational risks. There are no explicit legal restrictions in Lithuania pre- venting CASPs from obtaining banking or payment services. In practice, however, CASPs may face sig- nificant hurdles due to banks’ risk‑based onboarding and AML/CFT, sanctions and reputational concerns.
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