Licensing of Bitcoin Exchanges and Crypto Exchange Activity

There has been a steady rise in the number of cryptocurrency enthusiasts, despite the steep decline in the value of cryptocurrencies in the first half of 2018. It’s a good idea to build up cryptocurrency exchanges so that people may trade various cryptocurrencies or swap cryptocurrencies with conventional assets since this is among the most profitable ways to work in the crypto sector. The cryptocurrency license for a cryptocurrency exchange is necessary to secure its legality!

More than eight new cryptocurrency platforms were launched only in the first few months of 2018. For this reason, our organization has chosen to outline briefly the main forms of licenses for exchange activities connected to cryptocurrencies, the prerequisites to register such businesses, and so forth.

Varieties of cryptocurrency trading licences

Conditionally, The two types of crypto trading firms are as follows::

  • Exchanges that only enable you to trade cryptocurrencies back and forth amongst themselves are known as “classic” exchanges.
  • Traditional currencies may be exchanged for digital coins, on fiat cryptocurrency exchanges.
  • Similarly, permits to trade cryptocurrencies fall into two categories.

There are two types of permits that may be used to carry out these kinds of activities:

  • Cryptocurrency trading activities are subject to regulation by specialized licenses issued by recognized authorities.
  • Bitcoin and other cryptocurrencies are subjected involuntarily to traditional financial licenses, which govern the execution of financial activities (for example, in the USA, and Hong Kong).

Registering a bitcoin exchange in the appropriate jurisdiction

As of mid-2018, the most common countries to get a license for cryptocurrency trade are as follows:

  • Japan is perhaps the most “priced” country for cryptocurrency trading. Japanese virtual currencies were the winners in everyday transacted prices for a long time.
  • Singapore.
  • The United Kingdom.

Maltese legislation is currently being developed to govern financial technology around the nation, and leading traders have said that they want to relocate their operations to this jurisdiction shortly.

Licensing a bitcoin exchange entails the following steps in abbreviated form:

  • Doing business where you want to. As a general rule, prominent exchanges have several organizations that perform similar activities. It is necessary to carry out this procedure to maximize taxes and spread out financial risk.
  • Establishing a bank account to conduct business; 
  • Recruiting special workforce, like the AML-officer [expert accountable for the execution of anti-money embezzling strategy] as well as the Compliance-officer [expert liable for conformance with the purview of other compulsory prerequisites prescribed by legislation];
  • Setting up requisite technological equipment and apps; Receiving and preparing accounting transactions;

To start a cryptocurrency exchange, you must meet the usual AML criteria.

If you plan on opening a cryptocurrency exchange in a certain country, you should thoroughly research its AML laws. Generally, digital currency exchange in its activities must:

  • undertake complicated risk analysis methods;
  • routinely train the staff;
  • prepare internal certifications to reduce money laundering concerns; accounting
  • The reporting of questionable transactions and the routine communication of authorized entities about such transactions.

Contact Fintech Consulting for more information on the requirements for obtaining a cryptocurrency license within our jurisdiction.

The result of our collaborative efforts will be obtaining a crypto license in the shortest possible time and at a fair price. To obtain a license to trade cryptocurrencies, just call or email us.

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