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.

Telegram Pulls Plug on Its TON Blockchain Platform and Gram Tokens

Telegram is pulling the plug on its Telegram Open Network (TON) blockchain platform and the Grams token, after years of battling with the U.S. Securities and Exchange Commission (SEC).

In an announcement published on his public Telegram channel, the firm’s founder and CEO Pavel Durov said:

Telegram’s active involvement with TON is over. You may see – or may have already seen – sites using my name or the Telegram brand or the ‘TON’ abbreviation to promote their projects. Don’t trust them with your money or data.

In an accompanying blog post, Durov said the SEC’s winning of a preliminary conjunction in a U.S. court led to the decision, as it stopped Telegram from launching the TON network, or distributing the Gram tokens.

The move is rather abrupt as Telegram said less than two weeks ago it was looking to launch the network in April 2021. Last month, the firm announced investors could receive 72% of their funds back immediately, or 110% in a year once TON had launched. In the recent blog post, Durov didn’t specify whether investors would be refunded.

The Telegram Open Network was a blockchain platform that was set to offer anyone with a smartphone access to a decentralized cryptocurrency. Last October, however, the SEC ordered Telegram to halt its token sale as the firm reportedly failed to register an early sale of $1.7 billion worth of Gram tokens with the regulator.

The funds were raised in pre-initial coin offerings (ICOs) that Telegram conducted back in 2018. In his announcement, Durov argued American courts should not be able to stop the sale of the cryptocurrency outside of the country, and urged others to take up the fight for decentralization. Per his words, it may “well be the most important battle of our generation.”

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