A small European Union (EU) country is preparing to implement one of the region's strictest cryptocurrency crackdowns, warning that hundreds of unlicensed digital asset companies could face fines, website blocking, and even jail time starting next week.
The country's central bank has made it clear that any platform continuing to allow users to register or process crypto transactions without being licensed by MiCA after December 31, 2025, will be considered to be operating illegally.
Lithuania tightens crypto regulations from January 1st.
The Bank of Lithuania – the entity responsible for overseeing the country's crypto sector – has repeatedly urged service providers to register for licenses immediately. While over 370 businesses have been officially registered, only about 120 are actually operating and reporting revenue regularly.
It is noteworthy that less than 10% of these companies, or only about 30 entities, have submitted applications for MiCA licenses. This means that dozens of businesses are still operating, and hundreds of registered companies face the risk of penalties.
The transition period, which is the time for exchanges, wallet services, and other providers to apply for licenses, will end at the end of 2025.
After this deadline, the Lithuanian Bank (Lietuvos Bankas) announced it would take strong measures against non-compliant companies, including fines, website blocking, and criminal prosecution under national law. Violations could result in imprisonment for up to four years.
Ms. Dalia Juškevičienė, head of the Investment and Corporate Services Supervision Department of the Central Bank, emphasized that units that do not intend to continue operating must close down through proper procedures to ensure the rights of customers.
"Digital asset service providers that do not wish to continue operating should not delay but proactively inform all their customers in a timely manner about their closure plans," local media quoted Dalia as saying .
Customers need clear instructions on transferring their fiat and digital assets to another secure storage location or to a personal wallet before the service is discontinued.
This tightening of regulations transforms the Baltic nation into a place with strict controls on activities meeting MiCA standards, rather than an easy destination for crypto companies.
Authorities also affirmed that the crackdown would not stop at active platforms but would also apply to registered businesses that still maintain websites, accounts, or hold assets on behalf of customers.
This approach aims to protect investors and ensure transparency and a healthy digital asset market.
Europe tightens controls as the implementation of MiCA moves from theory to practice.
This increased enforcement is part of a broader wave of stricter crypto regulation across Europe. The MiCA rules, which mandate licensing and investor protection, have now officially come into effect.
This region sends a clear signal that unlicensed cryptocurrency operations will no longer be tolerated, creating a highly competitive environment for crypto companies in regulated markets.
Besides Lithuania, another European country also harbors similar goals. Latvia, Lithuania's northern neighbor, is also developing ambitions to become a gateway to MiCA-compliant crypto activities in the Baltic region.
Mārtiņš Kazāks, governor of the Central Bank of Latvia (Latvijas Banka), stated that his country possesses a highly qualified workforce, a dynamic business community, and a solid financial infrastructure. Thanks to these factors, they aim to leverage the crypto industry to drive economic growth.
“Latvia has the potential to become a European fintech hub, not only because of its ambition but also because we already have a solid foundation,” said Kazāks.
In light of these changes, global crypto exchange are rushing to complete MiCA compliance before the enforcement deadline.
Kucoin , one of the world's largest crypto exchanges by volume, has announced that it has met the MiCAR standard after receiving approval from the Austrian Financial Markets Authority.
Kucoin emphasized the crucial Vai of regulated crypto operations and committed to complying with this new legal framework.
Coinbase also completed these requirements four months ago, raising its EU compliance standards by publishing whitepapers that meet MiCA requirements.
Outside of Europe, Lithuania's move also reflects a similar trend in several regions such as the United Arab Emirates (UAE), where drastic reforms from the central bank have criminalized unauthorized crypto services , including self-custody wallets and market data providers.
These coordinated measures underscore the growing need for stricter controls, legal compliance, and investor protection on a global scale.
With the December 31, 2025 deadline fast approaching, crypto businesses in this Baltic nation have only a few days left to complete their licensing procedures or begin the proper closure process.
When authorities are ready to step in, next week could see a major shift for the European crypto market: non-compliant entities will be eliminated from the game, ushering in an era of stricter MiCA regulation than ever before.
