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Deal 5: FInCause Founder Waylon Yeh on Obtaining Electronic Money Institution License

Lithuania
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On March 17, CEE Legal Matters reported that Adon Legal has advised Taiwanese capital company FinCause on obtaining an electronic money institution license from the Bank of Lithuania. CEE In-House Matters spoke with Waylon Yeh FinCause Founder and Member of the Management Board to learn more about the matter. 

CEEIHM: To start, tell us a bit about FinCause and its operations.

Yeh: FinCause is a licensed electronic money institution based in Lithuania, with the ability to provide services throughout the entire European Economic Area. The company is currently preparing for the launch of operations, which involves setting up a comprehensive internal governance framework and implementing numerous IT integrations. 

Our license enables us to offer clients not only basic payment services but also more advanced and innovative solutions. FinCause's vision is to become the primary payments partner for our clients. We plan to serve small and medium-sized companies in Lithuania and the European Economic Area, Asian e-commerce companies selling products in Europe, operators of peer-to-peer lending and crowdfunding platforms, and Baltic retail businesses and online stores.

CEEIHM: As reported recently, ADON Legal advised you on obtaining an electronic money institution license from the Bank of Lithuania. What was the business case behind applying for this license?

Yeh: The finance sector is highly regulated, presenting significant barriers to entry. We felt that agency or white-label banking solutions, which many new market participants have chosen, were not sufficient for our needs. Applying for our own license provides more flexibility and long-term commercial viability. We believe there is great potential in servicing and building special integrations with other financial institutions, such as P2P lending and crowdfunding platforms. 

When making the decision, Lithuania had already established itself as a fintech hub, and we trust this status will continue in the future. Given my experience as Vice President of IBM and my previous involvement with a Lithuanian payment market participant, we also took into account the payments infrastructure access provided by the Bank of Lithuania and the potential of local IT solution providers to facilitate smooth operational setup.

CEEIHM: What can we expect from the company now that it has been secured?

Yeh: Now that we have secured our license, you can expect FinCause to fully establish its operations and begin offering a range of innovative payment solutions to our target market. We will focus on expanding our services across the European Economic Area, collaborating with financial institutions and technology providers, and continuously enhancing our offerings to meet the evolving needs of our clients.

In addition to FinCause, we are also working on another project, Fortress Factoring, which serves as a secure gateway for bilateral trade between Taiwan and Central/Eastern Europe. We believe that Fortress Factoring will be one of the first companies to become integrated with FinCause.

CEEIHM: What was the most complicated aspect of securing it from a legal perspective? 

Yeh: From a legal perspective, one of the most challenging aspects of securing the electronic money institution license was ensuring compliance with the stringent regulatory requirements imposed by the Bank of Lithuania. This involved demonstrating a strong understanding of anti-money laundering and counter-terrorism financing regulations, as well as other internal control and risk management areas. Additionally, forming a local team with the necessary expertise and experience to meet these regulatory demands proved to be a challenge for a company that was only seeking to obtain a license at the time.

CEEIHM: And why did you pick ADON Legal as your advisor in this process?

Yeh: We chose ADON Legal as our advisor due to their reputation in the fintech field and the personal recommendations for their managing partner, Donatas Sliora. The lawyers at ADON Legal have demonstrated a commitment to acting as a strategic partner throughout the entire process. They have lived up to our expectations by helping us avoid many mistakes that could have hindered our progress.

We felt confident that partnering with ADON Legal would give us the best chance of securing our license, laying the foundation for a successful business, and ensuring our long-term compliance. We are currently working on other projects with this law firm and plan to continue our cooperation in the future as well.

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