MiCA — Markets in Crypto-Assets Regulation

CRYPTOCURRENCY MARKETS

LAW

11 July 2024 Item no. XIV-2879

Vilnius

CHAPTER I

GENERAL PROVISIONS

1. The purpose of this Law is to ensure the guaranteed, fair, open and efficient functioning of the markets for crypto-assets referred to in the Annex to this Law, the protection of the interests of holders of crypto-assets other than asset-referenced tokens or electronic money tokens, holders of asset-referenced tokens or electronic money tokens, and clients of crypto-asset service providers, in order to ensure a stable, reliable, efficient and secure crypto-asset market.

2. The provisions of this Law are brought into line with the European Union act referred to in the Annex to this Law.

1. Supervisory authority shall mean the Bank of Lithuania, which, in accordance with the procedure laid down in Regulation (EU) 2023/1114, this and other laws regulating the financial sector, performs the issuance of asset-referenced tokens, issuers of electronic money tokens, crypto-asset service providers and other persons offering or requesting admission to trading of crypto-assets other than asset-referenced tokens or electronic money tokens, issuers of asset-referenced tokens, issuers of electronic money tokens, crypto-asset service providers and other supervisory functions assigned to the competent authority.

2. 'Head of an issuer of asset-referenced tokens or a crypto-asset service provider' means the sole manager, deputy, member of the board, member of the supervisory board (if the supervisory board is established) of the issuer of asset-referenced tokens or crypto-asset service provider.

3. Other terms used in this Law shall be understood as defined or used in Regulation (EU) 2023/1114, the Law on Financial Institutions of the Republic of Lithuania, the Law on Markets in Financial Instruments of the Republic of Lithuania, and the Law on Electronic Money and Electronic Money Institutions of the Republic of Lithuania.

CHAPTER II

REQUIREMENTS FOR LICENSING, OPERATIONS, ACCOUNTING AND AUDITING. PROCEDURE FOR THE EXAMINATION OF DISPUTES AND COMPLAINTS (REQUESTS)

1. The supervisory authority shall issue the following licences subject to the provisions of Article 16(1)(a) and Article 59(1)(a) of Regulation (EU) 2023/1114:

(1) the issuer of asset-referenced tokens;

(2) a crypto-asset service provider.

2. The legal form of an issuer of asset-referenced tokens operating in accordance with Article 16(1)(a) of Regulation (EU) 2023/1114 or of a crypto-asset service provider acting in accordance with Article 59(1)(a) of Regulation (EU) 2023/1114 may only be a public limited company or a private limited liability company ('the company').

3. An issuer or crypto-asset service provider of asset-referenced tokens shall operate in accordance with the requirements laid down in Regulation (EU) 2023/1114 and this Law.

4. A company seeking a licence as an issuer of asset-referenced tokens or as a crypto-asset service provider shall submit to the supervisory authority the data set out in Article 18 or Article 62 of Regulation (EU) 2023/1114, as applicable. The supervisory authority may request information to clarify these data. The Company must provide the corrective information within 20 working days from the date of receipt of the request to provide this information.

5. The supervisory authority shall follow the assessment criteria referred to in Articles 20, 21, 34 and Articles 63 or 68 of Regulation (EU) 2023/1114 when assessing the data and information provided by a company seeking a licence as an issuer of asset-referenced tokens or as a crypto-asset service provider.

6. Where the applicant company intends to carry out or carries out activities other than the crypto-asset service provider at the same time, the supervisory authority shall refuse to grant a crypto-asset service provider licence until a separate company has been established to carry out the activities of the crypto-asset service provider, where the applicant company's intention to carry out or carry out activities other than the crypto-asset service provider have or are likely to have an adverse impact on its financial or the ability of the supervisory authority to monitor compliance with all the requirements laid down in Regulation (EU) 2023/1114 and this Law. This paragraph shall also apply mutatis mutandis to a company seeking a licence as an issuer of asset-referenced tokens.

7. Following a decision by a supervisory authority to withdraw the licence of an issuer of asset-referenced tokens or a crypto-asset service provider in accordance with the procedure laid down in Article 24 or Article 64 of Regulation (EU) 2023/1114, respectively, the organs of the company of the issuer of asset-referenced tokens or crypto-asset service providers shall adopt a decision to wind up or reorganise the company or to adopt a decision to change the nature of the business, and to make relevant amendments to the Articles of Association, name and other necessary changes of the company related to the change of the type of activity, as well as to inform the supervisory authority of all decisions of the company's bodies referred to in this paragraph within 5 working days from the date of adoption of the decision.

8. Crypto-asset service providers shall ensure that their staff advising on crypto-assets or crypto-asset services have the necessary knowledge and competences to provide advice and keep that knowledge and competences up to date. The supervisory authority approves the list of required knowledge and competences and establishes criteria for the assessment of knowledge and competences.

1. An issuer of asset-referenced tokens or a crypto-asset service provider shall have the following governing bodies: the general meeting of shareholders, the board of directors and the manager.

2. Only persons who have been authorised by the supervisory authority to elect or appoint the manager of the issuer of asset-referenced tokens or of the crypto-asset service provider may become managers of an issuer of asset-referenced tokens or a crypto-asset service provider, in accordance with the procedures laid down by the supervisory authority.

3. The directors of the issuer of asset-referenced tokens or of the crypto-asset service provider shall be of good repute and shall have qualifications and experience capable of performing their duties properly as set out in paragraphs 4 and 5 of this Article.

4. When assessing the good reputation of a person who intends to become the manager of an issuer of asset-referenced tokens or a crypto-asset service provider, the provisions of Paragraphs 6 and 7 of Article 9 of the Law on Markets in Financial Instruments shall apply mutatis mutandis. The requirements of good repute, qualification and experience shall be assessed in accordance with Article 34(2) or Article 68(1) of Regulation (EU) 2023/1114 respectively, this Law and the procedures laid down in their implementing legislation.

5. The qualifications and experience of a person who intends to become the manager of an issuer of asset-referenced tokens or a crypto-asset service provider shall be assessed in the light of the level and nature of the person's education, further training, the nature and duration of the professional activity or work experience, and other factors that may affect the person's qualifications and experience, as determined by the supervisory authority in the light of the guidelines on the assessment of the suitability of the members of the management body and the persons performing key functions.

6. The supervisory authority, in the performance of the supervisory functions assigned to it by Regulation (EU) 2023/1114 and the Law on the Bank of Lithuania of the Republic of Lithuania and in pursuit of the stability, reliability, efficiency and security of the crypto-asset market, shall have the right to process personal data of the managers, employees or other natural persons of the issuer of asset-referenced tokens and the crypto-asset service provider, including special categories of personal data as defined by the European Parliament of 27 April 2016 and Article 9(1) of Council Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation), where necessary and necessary for the granting of the licences, authorisations and consents provided for in Regulation (EU) 2023/1114 and this Law.

7. The issuer of asset-referenced tokens or the crypto-asset service provider, in order to verify whether its managers are of impeccable reputation, shall have the right to apply to the Registrar of Suspects, Accused and Convicted Persons and to process the personal data of such persons, including data on the criminal record, in accordance with the procedure established by the legal acts regulating the legal protection of personal data.

8. An issuer of asset-referenced tokens or a crypto-asset service provider shall be required to notify the supervisory authority thereof and submit an application for authorisation to collect or appoint a manager of the issuer of asset-referenced tokens or crypto-asset service provider, as well as the data, information and documents required by the supervisory authority's legal act, confirming that the person complies with the requirements of Regulation (EU) 2023/1114 Paragraph 2 of Article 34 or, respectively, Paragraph 1 of Article 68, the requirements laid down in this Law and the legal acts implementing it.

9. An application for authorisation to

1. The supervisory authority may, in addition to the rights referred to in Regulation (EU) 2023/1114, require an electronic money institution to comply with the requirements referred to in Article 58(1) of Regulation (EU) 2023/1114 where necessary to manage the risks of an electronic money institution covered by compliance with the requirements referred to in Article 58(1) of Regulation (EU) 2023/1114.

2. Electronic money institutions to which paragraph 1 applies shall comply with the requirements laid down by the supervisory authority by decision of the supervisory authority.

The issuer of asset-referenced tokens and the crypto-asset service provider shall prepare and submit reports to the supervisory authority for supervision in accordance with the forms and in accordance with the procedures and deadlines laid down by the supervisory authority.

1. An issuer of asset-referenced tokens or a crypto-asset service provider shall maintain financial accounting in accordance with the Law on Financial Accounting of the Republic of Lithuania and prepare financial statements in accordance with the Law on Accountability of Enterprises and Groups of Enterprises of the Republic of Lithuania. The financial year of the issuer of asset-referenced tokens or crypto-asset service provider coincides with the calendar year.

2. The issuer of asset-referenced tokens or crypto-asset service providers shall submit financial statements prepared in accordance with the Law on Reporting of Enterprises and Groups of Enterprises to the supervisory authority in accordance with the procedures and deadlines established by the supervisory authority.

3. The data in the annual financial statements of the issuer of asset-referenced tokens or of the crypto-asset service provider shall be audited. The auditor or audit firm shall, following an audit of the financial statements of the issuer of asset-referenced tokens or a crypto-asset service provider, prepare an auditor's report on that set of reports and an audit report on the financial statements. In the audit report of the financial statements, the auditor or audit firm shall indicate any violations of this Law and other legal acts identified during the audit and provide information on whether:

(1) the crypto-asset service provider complies with the prudential requirements set out in Article 67 of Regulation (EU) 2023/1114 when calculating its own funds;

(2) the issuer of asset-referenced tokens complies with the own funds requirements set out in Article 35 of Regulation (EU) 2023/1114 and with the requirements referred to in Article 36(9) of Regulation (EU) 2023/1114;

(3) the crypto-asset service provider complies with the requirements laid down in Article 70(1) to (3) and Article 75(2) and (7) of Regulation (EU) 2023/1114.

4. Where an issuer of asset-referenced tokens redeems asset-referenced tokens in the cases referred to in Article 46 or 47 of Regulation (EU) 2023/1114, the auditor or audit firm shall provide information on whether the redemption of asset-referenced tokens has been executed without prejudice to the redemption and settlement conditions requirements specified by the asset-referenced token issuer in accordance with the provisions of Regulation (EU) 2023/1114 requirements laid down in Article 39, 46 or 47. This paragraph shall apply mutatis mutandis to auditors of issuers of electronic money tokens.

5. The procedure for carrying out audits of the financial statements of the issuer of asset-referenced tokens or crypto-asset service providers, other requirements for the auditor and the audit firm, the duties and responsibilities of the auditor and the audit firm shall be regulated by the Law on the Audit of Financial Statements of the Republic of Lithuania, the Law on Financial Institutions and Article 8 of this Law.

1. An auditor or an audit firm shall, after carrying out an audit of the financial statements of an issuer of asset-referenced tokens or a crypto-asset service provider, notify the supervisory authority in writing of circumstances or facts that may:

(1) justify a possible infringement of licences, permit conditions or company operating requirements laid down in Regulation (EU) 2023/1114 and this Law, or

(2) harm the company's uninterrupted pursuit of its activities, or

3) to create a basis for refusing to express an opinion on the financial statements or to form a qualified opinion.

2. The auditor or audit firm shall also be required to report to the supervisory authority the facts referred to in paragraph 1 of this Article and the circumstances that come to light in the course of an audit of the financial statements of an undertaking that has close links with an issuer of asset-referenced tokens or a crypto-asset service provider.

3. The disclosure of the supervisory authority referred to in paragraphs 1 and 2 shall not be considered as a breach of the prohibition on disclosure of confidential information provided for by law or contract and shall therefore not cause any negative consequences for the auditor or audit firm.

1. A client of a person who publicly offers or requests to be admitted to trading crypto-assets other than asset-referenced tokens or e-money tokens, a holder of asset-referenced tokens or e-money tokens, a client of a crypto-asset service provider, believing that a person who publicly offers or requests admission to trading crypto-assets other than asset-referenced tokens or e-money tokens, the issuer of asset-referenced tokens or e-money tokens or the crypto-asset service provider has infringed its rights or legitimate interests, has the right to take legal action or, if the customer of a person publicly offering or requesting admission to trading of crypto-assets other than asset-referenced tokens or e-money tokens, or a customer of a crypto-asset service provider is a consumer: to an institution dealing with consumer disputes out of court in accordance with the procedure established by the Law on the Bank of Lithuania and the Law on the Protection of Consumer Rights of the Republic of Lithuania.

2. The issuer of asset-referenced tokens and the crypto-asset service provider shall be required to examine complaints/requests from clients and other related persons related to the issuance of asset-referenced tokens or the provision of crypto-asset services (hereinafter referred to as 'complaints') in accordance with the procedure laid down in Regulation (EU) 2023/1114, this Law, its implementing legislation and the supervisory authority. The issuer of asset-referenced tokens and the crypto-asset service provider shall examine the written complaint of the client or other relevant person and provide a complete, reasoned, documented written response on paper or using another durable medium no later than 15 business days from the date of receipt of the complaint, if agreed between the client or other related person and the company. In exceptional cases, where, for reasons beyond the company's control, it is not possible to provide a response within 15 working days, it must send a provisional response to the customer or other relevant person clearly stating the reasons for the delay in responding to the complaint and the deadline by which the customer or other relevant person will receive a final response. In any case, the time limit for submitting a final reply may not exceed 35 working days from the date of receipt of the complaint. The Company examines complaints from customers and other related persons free of charge.

CHAPTER III

RIGHTS AND POWERS OF THE SUPERVISORY AUTHORITY