A case FOR our regulator
- Darius Klimašauskas
- Jan 16
- 3 min read
The Bank of Lithuania does not need any defenders. Yesterday, however, Verslo Žinios posted a nuanced article named „The Great Crypto Purge: Hundreds of Companies Deregister, Binance Left Behind”; it triggered a wave of commentary that, frankly, misses the bigger picture. Sometimes a bit of perspective is needed to understand what is actually going on.
Below are the seven most common slogans and misconceptions I’ve seen circulating, and why they don’t hold up:
1. Great Crypto Purge – there was no purge, for as long as I remember the crypto companies all around the world were constantly asking to be regulated by the financial authorities – and I can understand why a “Regulated by BoL” badge is valuable — and for good reason.
2. Lithuanian Bureaucrats Destroy the Market – nope, this was not a Lithuania specific issue; it took until 2024 for the European Banking Authority to get the regulation in place, and the Bank of Lithuania adopted this regulation accordingly, even extended the grandfathering period from May 2025 to January 2026 (though it could have been until July 2026); what is true is that the preparation work on certain specific implementation elements could have been executed better, for sure.
3. Hundreds of Companies Deregister - this was not a case where hundreds of previously issued licenses were revoked; the crypto market was previously not regulated by the Bank of Lithuania at all, and anyone and his grandma could establish a company and with one simple notification start offering crypto services.
4. Binance Left Behind – not speaking about Binance specifically, however it’s obvious that we don’t know the decision making process of each and every individual company; perhaps they submitted a request to become MICA compliant and were asked to improve, or perhaps they sought out greener pastures in other jurisdictions; as the article states, some of these companies had issues relating to shareholders being from jurisdictions that infringe on our national security interests.
5. Only Three Licenses Issued – yes, so far just three, but more and more qualified candidates are working on the application and will succeed; the licensing process for MICA is difficult, I agree, however the three successful recipients are the standard to which other should aspire to, not the 360 registered VASPs that we had before; many of these companies had no relationship with compliance or risk management, and thus were not able to efficiently prove to the regulator that they are have sufficient due care for clients and are here for the long-term.
6. We Are Losing Tax Dollars – yes, financial services companies contribute to our national budget in a big way; I‘m happy that this is being recognized and hopefully will pave a way for sustainable contributions to our long-term wellbeing and market development, however never at the cost of poor compliance or national security issues.
7. No Longer a Fintech Country – I would argue that a wild west with limited regulation is a bad sign for serious companies looking to cast their anchors, whereas a high compliance threshold increases the security perception for clients and services providers alike; Lithuania’s value proposition should be its ecosystem - not regulatory arbitrage.
Could the regulator be more efficient? Yes.
Was the MiCA licensing process frustrating at times? Also yes.
But Lithuania’s fintech strength should stem from things like a buoyant ecosystem, qualified people, strong IT base, innovation‑friendly environment, and an array of niche service providers. We’re seeing that in action — from hundreds of global institutions choosing Lithuania, to local champions like Vinted Pay rolling out new solutions supported by homegrown partners such as AMLYZE.
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