Get a cryptocurrency license abroad

Licensing of the activities of cryptocurrency exchanges or cryptocurrency exchangers

Despite the protracted fall of cryptocurrencies in the first half of 2022, the number of crypto enthusiasts and crypto businessmen continues to grow steadily. One of the most profitable activities in the crypto industry remains the opening of cryptocurrency exchanges, which, depending on the structure of the exchange itself, allow you to exchange different cryptocurrencies for each other, or exchange cryptocurrencies for traditional means. For the legal functioning of such an exchange, licensing the activities of a cryptocurrency exchange is mandatory!

In the beginning of 2022 alone, more than 8 new cryptocurrency exchanges were registered in the world. Given this trend, our company decided to briefly describe the main types of licenses for the exchange of cryptocurrencies, the requirements for registering such companies, and so on. Regarding obtaining a crypto licens , you can contact https://www.fintecharbor.com/crypto-license/

CRYPTO LICENSE

Conventionally, cryptocurrency exchangers can be divided into two categories:

- Classic cryptocurrency exchanges that allow you to exchange only cryptocurrencies among themselves.

- Fiat cryptocurrency exchanges that allow you to exchange fiat (traditional) currencies for cryptocurrencies and vice versa.

Moreover, licenses that allow such operations can be further classified into two groups:

- Specialized crypto-licenses that are specifically introduced by the competent government authorities to regulate cryptocurrency exchange operations (for example, in Japan or Estonia);

- Traditional licenses that regulate financial transactions and which indirectly cover cryptocurrency transactions (for example, in the USA, Hong Kong).

Jurisdictions for registering a CRYPTO EXCHANGE

The most popular jurisdictions for obtaining a license to exchange cryptocurrencies, as of mid-2022, are:

- Japan (in combination, it is the most “expensive” jurisdiction for opening crypto-exchanges. For a long time, it was Japanese crypto-exchanges that were the undisputed leader in terms of daily trading volumes);

- Estonia;

- USA (the license to work with cryptocurrency itself is somewhat different and depends on the type of activity of the future company);

- Hong Kong;

- Singapore;

- Great Britain.

Soon, this list will be replenished with Malta, which is actively developing legislation that will be aimed at regulating fin-tech activities in the state. The bills are already preparing a new, special license to work with cryptocurrency. The largest exchanges (such as Binance) have already announced that they will transfer their activities to this jurisdiction.

In a condensed form, the process of licensing a cryptocurrency exchange includes:

- company registration in the chosen jurisdiction. It is worth noting that, as a rule, the structure of large exchanges includes several companies with a division of functions. This is done to optimize taxation and diversify risks;

- opening accounts for the needs of doing business;

recruitment of specialized employees, the list of which varies depending on the chosen state (as a rule, it is necessary to appoint an AML-officer (-a) [a specialist who is responsible for implementing the anti-money laundering policy], Compliance-officer (-a) [a specialist who will be responsible for compliance with a number of other mandatory legal requirements];

- preparation of the necessary technical equipment and software;

collection and preparation of required documents for conducting activities.

It should be noted right away that if you want to start opening a crypto currency exchange, then you should familiarize yourself in detail with the AML legislation of the chosen jurisdiction. As a rule, a crypto-exchange in its activities must without fail:

Standard AML requirements for opening a cryptocurrency exchange

- Carry out complex risk analysis procedures (so-called due diligence);

- Conduct regular staff trainings;

- Draw up internal acts that will be aimed at minimizing the risks of money laundering;

- Reporting;

- Keeping records of suspicious transactions and regularly notifying the competent authorities of such transactions.