Latvian crypto asset law moves forward

In order to regulate the functioning of the crypto-assets market in Latvia, the Budget and Finance (Tax) Commission of the Saeima on Wednesday, May 22, conceptually supported the draft Law on Crypto-asset Services, as well as related amendments to seven more laws.  

The law is necessary to establish a legal framework for the operation of crypto-asset market in Latvia, taking into account the requirements of the European Union. The new law will apply to persons involved in the issuance of crypto-assets and their trade.

It is planned to designate the Bank of Latvia, the central bank, as the supervisory authority in the field of crypto-assets, in addition to its current role as the country's banking and financial services regulator.

The Bank of Latvia will also investigative powers, and it will be able to apply administrative measures and impose sanctions for violations in the field of crypto-assets. The Bank of Latvia will also be able to determine the criteria used by crypto-asset service providers to ensure that clients are provided with advice or information about crypto-asset services by individuals who have the necessary knowledge and competence in this field.

The new draft law determines the rights and obligations of crypto-asset service providers, including the obligation to register with the Bank of Latvia and obtain a permit to issue, publicly offer or allow trading of crypto-assets or to provide crypto-asset services. For the issuance of a permit, cryptoasset service providers will have to make a payment to the Bank of Latvia, and it is planned that this will depend on the amount of resources required for monitoring this area, the amount of services provided and the planned income from the provision of this service.    

Information provided by the Ministry of Finance shows that there are currently around 10 crypto asset service providers in Latvia, that have registered with the State Revenue Service, the tax authority. These service providers will have to re-register with the Bank of Latvia from July next year, according to the amendments.

It is planned that the Crypto Asset Services Law will come into force on June 30 of this year, but before then it will need to be approved by Saeima votes. The budget committee will ask the Saeima to include the bill in the agenda of the May 23 session of the Saeima.