Lithuania has Issued Guidelines on ICOs
The ministry of finance of Lithuania has issued directives and guidelines on ICOs stating when Cryptographic tokens can be termed as securities and how each type of tone is going to be regulated by the passed laws in the country. Through a document which was published on Friday, the main defining feature is whether a token offer governance right or profit to its investors who gain rights into the token through an Initial Coin Offering.
As much as existing civil code should apply to all projects which use tokens that are used as payment tools or even having rights to access several or specific products financial regulations should apply is token offer governance rights or profits.
More to that the finance ministry dissects an ICO into different areas like issued tokens, an entity which organized the sale, whether the ICO is a crowdfunding activity or even whether the ICO participates in secondary market exchanges. The ministry stated that each aspect should be regulated by its corresponding laws which have already been set up in Lithuania like the laws which govern financial instruments markets, governing securities and crowdfunding.
Even though the ministry has stated that the framework is not the final one the effort is aimed at bringing transparency to the industry so that ICOs in that country can continue to grow in a regulated environment.
According to Vilius Sapoka, the finance minister in Lithuania:
“The ICO market is not regulated yet. The market has a very great potential, however, there are many risks which the government must manage. We are working towards ensuring that Lithuania is the headquarters for ICO project promoters who are ready to work in a transparent and orderly legal environment.”
More to the financial regulations the guideline also outlines different views from the country’s financial crime investigation agency, anti-money laundering agency, auditing and tax agencies. A good example is that income obtained from individual purchases and sale of cryptocurrencies will be taxed at the rate of 15% fixed income tax rate.