Lithuania Raises Concern over High-Volume ICO Cryptocurrency Trading

That comes at a time when investigations into crypto trading habits are still ongoing.

The FCIS (Financial Crime Investigation Service) arranged the meeting with representatives from the Central Bank, the general prosecutor, and government ministries. In the press release, the committee revealed that the country processes huge cash flows from cryptocurrency to fiat.

According to the head of FCIS, Antonio Mikulsk, digital tokens have a huge turnover. However, there are concerns over converting them into euros and dollars very quickly, thus getting rid of cryptocurrencies as fast as possible.

The Lithuanian government had promised to create formal regulatory authority for virtual currencies and crypto-related products. Lithuania also noted the benefits of adopting a hands-on approach regarding the cryptocurrency industry.

Now, Lithuanian authorities are noting high turnover volumes in ICO, adding up to over $570 million (€500 million) over the last 18 months. As a result, the authorities are calling for strict anti-fraud mechanisms to steer the market in the right direction.

Quoting data from Versli Lietuva – a local consultancy firm, Mindaugas Petrauskas (FCIS deputy director) further added that Lithuania is among the world leaders according to ICO stats. The country shows a growth of 305% at its highest.

The FCIS is also investigating the role played by different banks in processing large crypto-to-fiat transactions from exchanges. According to a local news outlet, the authorities have stated that investigations must be conducted on every transaction exceeding $92,200 (€80,000).

Several regional banks have been linked to the investigations, including Swedbank, SEB Bank, and Danske Bank. According to the report, the total sum of cryptocurrency exchange transactions between 2017 and 2018 stands at $762 million (€661 million). The FCIS director said that such large volumes already cause suspicions since the €80,000 threshold usually involves about 100 business entities and 500 individuals.

Due to the general concern over cryptocurrency cash flow in a wild-west style, Lithuania is set to create a regulatory body that will oversee the growth of the industry, with a keen interest in the potential benefits of cryptocurrency and blockchain technology. However, Petrauskas says that ICOs may be a major stumbling block towards anti-fraud measures.