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 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.

Home Seller Sues Buyer Over Attempt to Pay in ‘Worthless’ Crypto

Mary Shea, a California-based psychologist looking to sell her home, has sued a potential buyer, Mike Cherwenka, over the latter’s attempt to pay 30% of the property’s value in the form of a “worthless” cryptocurrency called “Troptions.Gold.”

Shea, according to Law360, is accusing Cherwenka and his firm, Best Buy Homes, of violating securities and state racketeering laws by misleading her and other members of the public when it comes to the Troptions cryptocurrency.

The complaint states:

Cherwenka and Best Buy defrauded Shea by executing a scheme whereby they would offer to purchase her property for cash, and then, as part of the scheme, introduce confusing and false statements into the real estate contract that would, in their view, give them license to 'pay' for the property using worthless Troptions.Gold.

According to Law360 Shea negotiated with Cherwenka a sale price of $125,000 for the property, but the buyer then presented a contract with clauses related to part of the payment being made with Troptions tokens. Shea claims she was assured an independent attorney would confirm the funds before the deal’s closure, but she later discovered the attorney was associated with Cherwenka.

Taking this into account Shea refused to finalize the sale and was then taken to court by Best Buy Homes, in a case that reportedly had no standing because the firm’s name wasn’t listed on the contract. It then voluntarily dismissed the suit but filed a notice of pending litigation, which has been preventing Shea from collecting rent or selling the property, while forcing her to keep making mortgage payments.

The lawsuit reads:

Every day that Best Buy wrongfully claims an interest in her property, Shea cannot find a buyer who will pay legal tender.

Shea claims she was planning to use the funds from the sale to pay off student loan debt. Troptions, it’s worth noting, was last year hit with a cease-and-desist order from Missouri secretary of state Jay Ashcroft.

Featured image via Pixabay.