Lithuania Issues ICO Guidelines
The Ministry of Finance in the Republic of Lithuania issued a series of guidelines for ICOs and they align to the United States quite comparatively. The Eastern Europe country has been a standout in the world of blockchain, ICOs, and cryptocurrency. The country is aiming to be a major player in the industry and these guidelines held accelerate that process. Here is what the Minister, Vilius Sapoka, said in a statement:
“We can not ignore the development of new financial instruments and phenomenon of blockchain technology. We do believe that certain usage of it, such us ICOs, should be regulated[…] We acknowledge that the brave new crypto economy world is here to stay, this is why we encourage and invite its participants to innovate and create in Lithuania.”
“ICO market has not been regulated yet. It has huge potential but there are risks that we must manage. We should make our efforts for Lithuania to become the main headquarters for those ICO project promoters who are willing to operate in a transparent and orderly legal environment.”
Sapoka and the Ministry gave clear guidelines on what is a token versus a security – essentially applying the Howie Test – and offered information on tax guidelines. In addition, the guidelines make clear that expenses for getting an ICO platform up and running. Sales of the tokens raised after an ICO are subject to the amount paid for it, in others, its fair value. The books should use a data source should be used to determine the token’s fair value, which includes the average market prices published by major cryptocurrency exchanges.
This announcement signals that cryptocurrency and ICOs are here to stay. The model Lithuania is using – which has borrowed itself – will probably be used by other countries looking to add transparency to their market.
“Lithuania already has an exceptional regulatory advantage. We are one of the first ones in Europe who prepared comprehensive Guidelines on legal framework for ICO projects covering regulatory as well as taxation and accounting,” Sapoka also added.
Most important to note here, the Central bank of Lithuania recently said that ICO projects managed by Lithuanians have raised at least 250 million U.S. dollars worldwide in the first three months of this year.