Common Mistakes to Avoid During the Crypto License Application

Navigating the crypto license application process in Lithuania demands precision and attention to detail. Below are some common mistakes that applicants should avoid to ensure a smoother and more successful application experience.

1. Incomplete or Incorrect Documentation

  • Mistake: Submitting documents that are incomplete or contain errors.
  • Avoidance: Thoroughly review all documents before submission and ensure that they meet all regulatory requirements.

2. Lack of a Comprehensive Business Plan

  • Mistake: Providing a business plan that lacks detail or does not adequately address all required areas.
  • Avoidance: Develop a robust business plan that clearly outlines your business model, target market, operational processes, and risk management strategies.

3. Insufficient AML and KYC Policies

  • Mistake: Implementing AML and KYC policies that are not robust or tailored to your specific business operations.
  • Avoidance: Develop comprehensive and stringent AML and KYC procedures that are specific to your business and compliant with Lithuanian regulations.

4. Inadequate Capitalization

  • Mistake: Failing to meet the required capital thresholds for your specific type of crypto service.
  • Avoidance: Ensure that your business has sufficient initial capital and provide accurate financial documentation to prove it.

5. Neglecting Physical Presence Requirements

  • Mistake: Not establishing a physical office and local team in Lithuania.
  • Avoidance: Set up a physical presence in Lithuania, including an office and local staff, as required by the regulators.

6. Overlooking Ongoing Compliance Obligations

  • Mistake: Focusing solely on the application process and neglecting ongoing compliance obligations.
  • Avoidance: Develop a plan for maintaining compliance with all regulatory requirements post-licensing.

7. Misunderstanding the Processing Time

  • Mistake: Underestimating the time it takes to process a crypto license application.
  • Avoidance: Be prepared for the application process to take several months and plan accordingly.

8. Failing to Seek Professional Advice

  • Mistake: Attempting to navigate the application process without seeking advice from legal or financial experts.
  • Avoidance: Engage with professionals who specialize in crypto regulations in Lithuania to guide you through the application process.

9. Lack of Transparency

  • Mistake: Not being transparent about your business operations or ownership structure.
  • Avoidance: Ensure full transparency in your application and all supporting documents.