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Prior to the launch of The Token RegRadar, we developed an article series, ‘Ask Me Anything…’, demonstrating the abilities of the new regulatory GPT embedded in to the platform. Since the revolutionary regulatory tool has been released, we decided to continue the theme through various articles examining prominent topics within the space. The question this time is “What rules and restrictions govern the conduct of and investment in security tokens in Lithuania?” diving into the regulatory landscape of Lithuania.

We will continue to reach out to our community to explore new topics to demonstrate and test the new regulatory GPT in the future, we encourage our readers to reach out with topics they want examined related to regulation in the asset tokenization space.

  • What rules and restrictions govern the conduct of and investment in security tokens in Lithuania?
  • In Lithuania, the conduct of and investment in security tokens are governed by several laws and regulations, which include:
    Law on Securities of the Republic of Lithuania: This law regulates the offering of securities to the public and their admission to trading on a regulated market. It stipulates that certain offerings, such as those made to professional investors or informed investors, do not require the publication of a prospectus.

    Law on Markets in Financial Instruments: This law establishes criteria for professional investors and details the regulatory framework for financial markets, which would apply to security tokens if they are classified as financial instruments.

    Law on Collective Investment Undertakings Intended for Informed Investors: This law provides criteria for informed investors and outlines the conditions under which certain offerings to these investors do not constitute a public offering of securities.

    EU Prospectus Regulation: If security tokens are considered transferable securities or other financial instruments, they may be subject to the EU Prospectus Regulation, which requires the publication of a prospectus for public offerings of securities within the European Union.

    Guidelines on Security Token Offerings (STOs): The Bank of Lithuania (BoL) has issued guidelines on STOs, which clarify the legal qualification and interpretation of STOs in the context of existing regulatory frameworks. These guidelines aim to provide clarity without introducing additional regulations.

    Law on the Prevention of Money Laundering and Terrorist Financing: Entities dealing with security tokens may need to comply with this law, which includes requirements for the registration of virtual currency operators and oversight by the Financial Crime Investigation Unit of Lithuania.

    Law on Electronic Money and Electronic Money Institutions: This law may apply if payment providers enable the transfer of fiat currency via a crypto-asset, which could be relevant for security tokens with payment functionalities.

    MiFID II: The transposition of the Directive 2014/65/EU (MiFID II) into Lithuanian law may also affect security tokens, particularly in determining whether they are considered transferable securities or other financial instruments and the regulatory aspects of related STO activity.

    These laws and regulations set the framework for the issuance, offering, and trading of security tokens in Lithuania, ensuring that such activities are conducted in a regulated and transparent manner, with appropriate protections for investors.

If you want to know more about a subject, you can simply ask the RegGPT follow-up questions or use The Token RegRadar’s other features like the search engine, the collection of law texts and more.

If this made you curious about how we The Token RegRadar can help you in your daily work, we offer a special introductory offer: Enjoy a 10% discount for a three-month subscription (code: Launch10). Plus, a 2-day free trial is available for you to explore its features. Discover more on The Token RegRadar’s Site: https://regradar.thetokenizer.io/

Previously we’ve asked the AI:

“How can smart contracts encode compliance rules or regulations into digital assets and tokenized securities?”

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“I want to tokenize an asset in the US, but I am unsure of whether I need to make a prospectus and whether I am allowed to sell to retail investors and to investors outside the US. Can you provide me with a quick overview of the rules and the exemptions? I have heard that some of these exemptions have names like A, D and R, is that correct?”

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Image by Vitalijs Barilo from Unsplash

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