Cryptocurrency is one of the top popular activities of the modern world.
In order to fully use the potential of the crypto-currency sphere, to become a full participant in the digital asset market, an appropriate crypto-currency permit is required. The presence of a crypto license allows you to work legally in the territory of the permit, makes the crypto business transparent, and increases the confidence of customers, partners and government regulators.
Obtaining a cryptocurrency license is obtaining official permission to carry out operations with virtual assets. A crypto license allows you to conduct a regulated cryptocurrency business in accordance with the legal requirements of the country (jurisdiction) of obtaining such a permit. Cryptocurrency business licenses allow the company to operate as an exchange of digital assets in this territory, to carry out operations with cryptocurrencies, including the exchange, trading, storage of digital assets.
In international practice, there are several categories of cryptocurrency licenses that can be obtained by companies operating in the virtual asset market:
- Traditional licenses are aimed at regulating financial transactions.
- Specialized licenses for crypto-currencies, which are used by competent financial institutions to settle crypto-currency transactions.
With a narrower approach, the following categories of crypto licenses are distinguished:
- Licenses for the operation of crypto-exchanges and crypto-currency exchange providers (service provider license) for fiat-to-crypto, crypto-to-fiat and crypto-to-crypto exchanges. The presence of a license allows you to conduct crypto-exchange transactions, as well as convert cryptocurrencies to fiat money.
- Licenses for maintenance and storage of funds in cryptocurrencies. A cryptocurrency service provider license is issued to financial market operators who plan to provide services for storing crypto assets, administering electronic wallets or virtual token wallets. Licensed custodial wallet providers may also offer additional services to their customers.
Authorities issuing licenses for cryptocurrency transactions
The most popular jurisdictions for registering a crypto-custodial business are:
- European Economic Area: Lithuania, Czech Republic, Poland, Slovakia, Estonia, Switzerland, Greece( here you can find more information about Greece citizenship by investment), Cyprus, and other countries;
- United Arab Emirates;
- Hong Kong;
Licenses for conducting operations with virtual currencies are issued by specialized financial institutions that supervise, regulate and control the cryptocurrency business or digital assets in a particular country.
Below are the generalized steps for obtaining a cryptolicense:
- Determining the appropriate jurisdiction and authorization requirements for a cryptocurrency business. Depending on the planned activity of your company and the jurisdiction of the client base, TK Deal specialists will offer the optimal jurisdiction and type of cryptocurrency license for your business model.
- Establishment and registration of a company to operate as a virtual asset service provider. Registration of a company in the chosen jurisdiction is carried out in accordance with the local legislative field after a detailed and comprehensive check of the constituent and internal documents, KYC and AML provisions.
- Opening a corporate settlement account and crediting the minimum paid-up capital required to obtain a license. In addition, a partnership with a bank or financial institution is required to organize the exchange of digital coins for fiat currencies.
- Preparation of documents. At this stage, the necessary documents are being prepared for filing an application for cryptocurrency licensing. The package of documents includes: the company’s business plan, the company’s KYC / AML policies and other documents in accordance with the requirements of the licensing jurisdiction.
- Compliance with local laws and regulatory requirements. Recruitment of qualified employees in accordance with the regulations of the jurisdiction.
- Applying for a license. At the final stage, an application is submitted to the local regulatory authority for a cryptocurrency license. Depending on the jurisdiction, an interview with the regulator may be required prior to license approval. Licensed companies are required to start business operations on time to maintain the license.
- Before making a decision to register a business in the field of circulation of crypto-currencies, it is necessary to seek legal advice regarding crypto-licensing options.