LITHUANIA Law and Practice Contributed by: Donatas Šliora and Marius Matiukas, ADON legal
10.10Regulation of Funds Based on the Bank of Lithuania’s position regard - ing virtual assets and issuance of virtual assets tokens, management of funds for investment in crypto-assets (excluding funds intended for professional investors) may be incompatible with the main activity of supervised financial institu - tions. Thus, only funds intended for professional investors may invest in crypto-assets. This position will likely be adjusted; however, investment restrictions are likely to remain, especially for strictly regulated UCITS funds. 10.11Virtual Currencies With MiCA entering into force, all blockchain assets are collectively referred to as crypto- assets, into which fall traditional cryptocurren - cies. Cryptocurrencies that are not considered ARTs or EMTs generally fall into the category of remaining crypto-assets. 10.12Non-Fungible Tokens (NFTs) NFTs are not directly addressed either in the EU or in national legislation. MiCA is no exception to this, as it specifically states that it does not apply to NFTs. That said, ESMA has published Guidelines on the condi - tions and criteria for the qualification of crypto- assets as financial instruments that address whether an NFT may fall under MiCA: • if the NFT lacks distinct attributes and shares comparable, interchangeable characteristics with other tokens (in its collection, for exam - ple), it should be viewed as fungible; • NFTs that are part of a collection or series can lose their uniqueness if their value is influ - enced by the other NFTs in the series; • when multiple NFTs provide the same util - ity or access rights (eg, event access), they
related to cryptocurrencies. However, servic - es such as staking may fall under the broader category of crypto-asset services, potentially requiring a MiCA licence and compliance with established standards. 10.7 Crypto-Related Lending Currently, Lithuania lacks specific regulations for lending services involving cryptocurrencies. Lending or borrowing of crypto-assets is not automatically considered a licensable activity under MiCA; however, typically it forms part of a licensable activity due to other related services – eg, provision of custody and administration services. 10.8 Cryptocurrency Derivatives Typically, cryptocurrency derivatives are con - sidered financial instruments, and the general Prospectus Regulation and MiFID II framework is applicable. 10.9 Decentralised Finance (DeFi) Decentralised finance (DeFi) platforms operate in a regulatory gray area in Lithuania. There is no specific legislation governing DeFi services, and the decentralised nature of these platforms complicates regulatory oversight. However, if a DeFi platform facilitates the trading of security tokens or cryptocurrencies, it may be subject to existing financial regulations, especially if it involves intermediaries or offers services akin to traditional financial activities. It is important to note that the regulatory land - scape is evolving, and the full impact of MiCA on these areas will become clearer as the Reg - ulation is fully implemented and interpreted by national authorities.
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