Lithuania: Central Bank Policy Update Opens Crypto Investment Funds to Professional Investors

The Central Bank of Lithuania has recently updated its policies on cryptocurrencies and initial coin offerings (ICOs), effectively allowing cryptocurrency-based investment funds to operate in the country.

According to Finance Magnates, the central bank has reportedly attempted to give financial market participants (FMPs) a “level playing field” when looking into the nascent industry. The Bank of Lithuania has now established that FMPs can launch investment funds for “virtual assets,” and has created parameters for how and when these assets can be used as a payment method.

The documents read:

Taking into account current market developments and evolving regulatory regimes as well as seeking to ensure a level playing field for all financial market participants, the Board of the Bank of Lithuania has updated its position on virtual assets and initial coin offering[s].

The central bank’s new policy means professional investors can create funds for digital assets, and that private companies can receive cryptocurrency payments processed by third-party exchanges, that turn them into local fiat currency.

It notes, however, that FMPs can’t accept digital assets if they’re then required to repay them, with or without interest. They’re also prohibited from issuing cryptocurrency-based loans, or from accepting virtual assets as collateral, unless they’re legally seen as securities.

Per the central bank, FMP should still attempt to separate their traditional financial activities from those related to virtual assets. They should, in fact, not provide services related to the cryptocurrency industry.

Crypto Growing in Lithuania

In Lithuania, the cryptocurrency scene has notably been growing. Recently, cryptocurrency wallet provider Blockchain.com opened offices in the country, and the amount raised by ICOs based in the country has kept on growing.

According to the report, it may have been behind Lithuania’s recent move, as the country saw a need for tougher anti-fraud measures with the growing popularity of the fundraising practice. As CryptoGlobe covered, in April of last year the central bank initiated a dialogue between crypto investors, banks, and regulators.

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Chinese Court Rules Bitcoin Is Legally Protected Virtual Property

The Hangzhou Internet Court, in China, has recently ruled bitcoin is seen as virtual property in the country, and as such is legally protected.

The ruling came in a case in which the plaintiff, Mr. Wu, sued the Shanghai Technology Company, which allegedly operated the FXBTC cryptocurrency exchange on Taobao, a leading Chinese online marketplace, and sold bitcoin back in 2013.

Wu reportedly bought 2.675 BTC for 20,000 yuan, about $2,900, back in 2013 from the exchange. In 2017, during the cryptocurrency market’s bull run that saw bitcoin hit a near $20,000 all-time high, the buyer wanted to access the funds, but found out FXBTC closed and could no longer get to the BTC.

According to Beijing News, the plaintiff claims the Shanghai Technology Company didn’t warn it was closing the platform nor gave him a chance to access the funds afterwards. The store likely shut down as between 2013 and 2017, the Chinese government made it illegal to trade cryptocurrencies, which in turn forced Taobao to stop vendors from selling cryptos on its platform.

While the plaintiff failed to prove Shanghai Tech was the vendor that sold him the bitcoin and lost the case, the court did determine bitcoin is legally protected virtual property.

According to Dovey Wan, this was seen as a bullish signal in China and chatter on Weibo, a Chinese microblogging platform similar to Twitter, seemed to point to this as the reason behind bitcoin’s recent price surge.

According to CryptoCompare data, BTC rose 4.8% in the last 24-hour period, and is currently trading at $10,300. Earlier today, bitcoin jumped from a $9,400 low to as much as $10,500 before facing a small correction.

Notably, this isn’t the first time a Chinese court defends bitcoin. As CryptoGlobe covered late last year, an arbitration court ruled bitcoin should be protected as property by law, and clarified at the time Chinese law doesn’t forbid owning or transferring bitcoin. Earlier this year, a prominent Chinese lawyer argued owning and occasionally trading bitcoin is legal in the country.

On Twitter, Wan clarified that while holding bitcoin as private property is legal, trading the cryptocurrency “in a systematic way” isn’t.