How to obtain a cryptocurrency license in Latvia

Regulation of the cryptocurrency market is constantly becoming stricter. Nowadays jurisdictions impose high regulatory and risk management requirements on virtual asset service providers.

Despite this, we always manage to find a solution that suits the client. All the time our team provides research of the market and regulations on various markets to find the best jurisdiction. Not so long ago we have made the global overview of the VASP regulation in EEA and ready to share information with our future and existing clients. Today we will look at the features of obtaining a cryptocurrency license in Latvia.

Tax Summary:

  1. Personal income tax –  20/23/31%
  2. Corporate income tax – 20%

What law/s governs VASP activities?

  1. Law on the Prevention of Money Laundering and Terrorism and Proliferation Financing (“LPMLTPF“)
  2. Amendments to the Law on Prevention of Money Laundering and Terrorism and Proliferation Financing (“Amendments”)

What activities are included in VASP services?

Section 1 of the LPMLTPF states that virtual currency service provider (“VCSP“)  – the person providing virtual currency services, including the provider of services of exchange of the virtual currency issued by other persons, which provides the users with the possibility to exchange the virtual currency for another virtual currency by receiving commission for it, or offer to purchase and redeem the virtual currency through a recognised legal means of payment.

In addition, Section 1 of the Amendments provides that cryptoasset service provider’ means a person who, in the course of his professional or commercial activity, performs one or more of the following activities on behalf of, or for the benefit of, a client:

  1. The exchange of crypto-assets for currency issued by national central banks.
  2. The exchange between one or more types of crypto-assets.
  3. The transfer of crypto-assets.
  4. Holding or managing crypto-assets or instruments that provide control over crypto-assets.
  5. The provision of financial services and participation in the provision of financial services in connection with an issuer’s offering or sale of crypto-assets.

Who is the VASP regulator?

  1. Latvijas Banka
  2. State Revenue Service (“SRS“)

What is the procedure for registering a VASP for a local company?

In Latvia, there is no specific regulatory framework for establishing cryptoassets business. Additionally, there is no requirement or prohibition on obtaining a cryptolicense.

VCSPs are subjects of the LPMLTPF, meaning that they are required to: 

  1. Register with the SRS as subjects of the LPMLTPF, including appointing a responsible person.
  2. Conduct and document the assessment of the money laundering and terrorism and proliferation financing risks.
  3. Establish an internal control system.
  4. Report unusual and suspicious transactions.

Is there any specific authorization required for a VASP from another EU member state to provide services in this jurisdiction?

Latvian law does not contain any relaxation in the definition of persons who must register with the SRS as obligated persons under the LPMLTPF.

Thus, foreign entities must follow the general registration procedure even if they hold a VASP license issued by another EU member state.

What is the liability for the activities of a VASP from another EU member state without local registration/authorization in this jurisdiction?

Section 78 of the LPMLTPF:

  1. The following sanctions may be imposed on the subject of the LPMLTPF for the violation of the laws and regulations in the field of the prevention of money laundering and terrorism and proliferation financing, including in relation to the customer due diligence, monitoring of the business relationship and transactions, reporting of suspicious transactions, provision of information to the supervisory and control authority or the Financial Intelligence Unit of Latvia, refraining from execution of a transaction, freezing of funds, internal control system, storage and destruction of information:
  • to express a public announcement by indicating the person liable for the violation and the nature of the violation;
  • issue a warning;
  • to impose a fine on a person (natural or legal) liable for the violation in double the amount of the profit obtained as a result of the violation (if it can be calculated) or another fine up to EUR 1 000 000;
  • to suspend or discontinue the activity (including to suspend or cancel the license (certificate) or to cancel the entry in the relevant register, to suspend economic activity, to apply a prohibition on changes in the registration in the commercial register for reorganization of a commercial company and change of shareholders) and to give orders to credit institutions or payment service providers regarding partial or complete suspension of settlement operations of the subject of the LPMLTPF;
  • to set a temporary prohibition on a person liable for the violation to fulfill the obligations specified for him or her by the subject of the LPMLTPF;
  • to impose an obligation to perform certain action or refrain therefrom;
  • to impose an obligation on the subject of the LPMLTPF to dismiss the person liable for the violation from the position held.
  1. If it is laid down in laws and regulations that in order to perform an economic or professional activity it is necessary to receive a special permit, for example, a license, or to register in a register, but the subject of the LPMLTPF has not done it and laws and regulations do not provide for administrative liability for failure to fulfill this obligation, the supervisory and control authority is entitled to apply to the subject of the LPMLTPF the sanctions specified in Paragraph one of this Section.

Manimama Legal & Growth Agency provides a gateway for the companies operating as the virtual asset wallet and exchange providers allowing to enter to the markets legally. We are ready to offer an appropriate support in obtaining a license with lower founding and operating costs. We offer KYC/AML launch, support in risk assessment, legal services, legal opinions, advice on general data protection provisions, contracts and all necessary legal and business tools to start business of virtual asset service provider.


The content of this article is intended to provide a general guide to the subject matter, not to be considered as a legal consultation.