The Most ICO-friendly Jurisdictions — the Baltic States and Belarus edition (Part 2)

In the first part of this series I examined the most ICO-friendly jurisdictions of the Caribbean. If you missed it, you can read Part 1 here. Are the Baltics not your thing? Then if you so desire you can jump ahead to Part 3 here.

In this second part of the series, I set sail for the Baltics, in particular to Estonia and Lithuania and then from there I head inland to Belarus. The governments of all three of these countries have shown strong interest in attracting DLT and ICO-launching enterprises to their jurisdictions. While Estonia is already considered to be one of the most digitally advanced nations on Earth their participation in the DLT sphere is rivalled only by Lithuania, a country which is working really hard to accommodate entrepreneurs to this new technology. Belarus, which shares a border with Lithuania stands on its own as offering a really great tax-incentive — specifically designed to attract DLT business to the country.


From a digitalization perspective Estonia is considered to be one of the most advanced countries in the world, it is also one of the first to dabble in blockchain technology (actually, even before the technology had the blockchain name). The Tiigrihüpe (Estonian for Tiger’s Leap) ideology saw major investment in and development of Estonia’s computer and network infrastructure and acted as a catalyst to digitally transforming the communications, politics and economics of the country. In recent times, Estonia has developed a digital ID system, e-voting and now the much lauded e-Residency program, which has to date provided digital services from the government of Estonia to around 40000 people from 150 different countries. There is also Estcoin, a government backed cryptocurrency initiative, which unfortunately appears to be dead in the water after Mario Draghi, the President of the European Central Bank, said that “No member state can introduce its own currency; the currency of the eurozone is the euro.”

However, despite this recent setback, the government of Estonia continues to be committed to adopting a DLT and ICO-friendly regulatory environment. The state-backed Financial Supervision Authority, Finantsinspektsioon, of Estonia, which overlooks the country’s financial system, has published a legal framework for initial coin offerings in Estonia, to provide clarity to investors and issuers on the regulatory requirements. In the framework, attention is given to securities (if the coin or token is deemed a security then a prospectus according to Section 14 of the Securities Market Act (SMA) must be filed) and AML considerations (wherein businesses dealing in virtual currencies must comply with Estonia’s Money Laundering and Terrorist Financing Prevention Act (MLTFPA)). While this pronounced regulatory environment might potentially scare away some enterprises looking to launch an ICO (though it shouldn’t, given the security it offers to investors), the ease of setting up a company, especially as a foreigner (via the e-Residency program), allowing access to Estonia’s high-quality government services from anywhere in the world, has and will continue to attract many aspiring DLT enterprises to the country.


With the largest economy of the Baltic States (slightly larger than Estonia’s economy), and a per capita GDP (PPP) at around $35000 US, Lithuanians are well-enough-off to take risks investing in innovative technologies: specific to DLT, Lithuania has gone all in. In 2017, Lithuania placed third, behind the United States and China, in terms of total amount of money raised through ICOs, and the amount is not small, at around $500 million US. This amount is all the more impressive given the massive difference in population between these countries.

Vilnius, the capital of Lithuania, is home to the Blockchain Centre, which, connected to other Blockchain Centres in Melbourne and Shanghai, serves as a portal to “incubate and accelerate blockchain start-ups”. Similar to Estonia, Lithuania has published a regulatory framework for ICOs — ICO Guidelines — under the auspices of the Ministry of Finance. Like Estonia’s publication, the Lithuanian document focuses on the tax, securities and AML requirements in a clear and level-headed manner. Conveniently, the document also provides a link to the Bank of Lithuania’s position on ICOs, which follows and reaffirms the guidelines set out in the Ministry’s guide.

Perhaps the most interesting innovation coming out of crypto-friendly Lithuania is DESICO, a platform for launching security ICOs, which has backing from the Lithuanian government. The platform aims to offer a user-friendly, legally compliant (EU-wide) service to enterprises aspiring to launch an ICO that would likely be classified as a security. I cannot say much more about the project and remain curious to see if it will function as intended. It almost sounds too good to be true, but it is certainly well thought out with a 59 page white paper detailing the project (though it is rife with grammar and typo errors — which really irks the editor in me). In the end, one can only wait and see how many enterprises signup to launch an ICO using the DESICO platform.


Within a few hour’s drive from Vilnius, one would arrive in Minsk, Belarus another DLT and ICO hotspot. The most pronounced development on the DLT front in Belarus is that of President Alexander Lukashenko’s decree On Development of Digital Economy, which legalizes “businesses based on Blockchain technology, as well as any activity related to cryptocurrencies and digital tokens”. Furthermore, all income from crypto transactions, mining and related areas will be tax free for 5 years — until January 1st, 2023.

The aim, according to the decree, is to entice global enterprises from the flourishing crypto scene to headquarter in Belarus. However, plans appear to have hit a speed bump as Belarusian banks are not yet equipped to deal with cryptocurrencies, especially with regards to the global AML considerations and the inability to satisfactorily identify the individuals that are involved in a given transaction.

Despite this setback there is one international ICO with a fair amount of clout that is launching its ICO from Minsk, the UK/Belarus Jinbi token. Jinbi is a gold-backed cryptocurrency which, as of the publication of this piece, is running its mainsale. What is most interesting, from a regulatory point of view, is that Jinbi was originally a UK/Switzerland based project but is now a UK/Belarus project. I reached out to Joseph Crawley one of the Co-founders of Jinbi and learned from him that they had originally planned to launch out of Zug, but that due to the “regulatory landscape” there it was no longer feasible. It appears that in addition to Lukashenko’s decree, remaining outside of the EU might also be an attractive feature.


It is readily evident that similar to the DLT and ICO-friendly jurisdictions explored in the Caribbean in Part 1, there is also a strong movement to adopt this new fintech into the countries explored above. Two of them are EU members and we will have to wait and see what sort of regulations the EU’s financial framework adds to their endeavours. The other, Belarus, appears to be freer in its movements to attract this new technology, but still retains some external pressure from the regulatory environment of the global financial system.

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