What are some essential procedures for obtaining a license for a cryptocurrency exchange, and why is such an aspect vital for the newer companies?
Decentralization and anonymity are necessary features of digital currencies. On the other hand, the sector emerges from the shadows. Governments have recognized the growing potential of cryptocurrencies and are working on explicit norms and regulations for the crypto market.
Centralized, licensed trading platforms are seen as the future of crypto trading. What are the mandatory steps to obtain a license to exchange cryptocurrencies? Let’s immerse ourselves in the necessary measures and pitfalls.
Why would you get a license for a newer crypto exchange?
The holders’ funds are much more protected if a trading platform is licensed, as an exchange must meet legal norms and standards.
Unlicensed exchanges never need any personal details from new players; this has now become a chance for those who make money and finance criminals. The violations above are among the most critical problems, and governments are taking strong measures to prevent them.
As the crypto market is making its way out of the shadows, AML and KYC guidelines are among the fundamental steps for the mass adoption of cryptocurrencies. In addition, beginners and investors prefer to rely mainly on centralized and licensed exchanges.
Where do you get a crypto license?
A crypto license is one factor you should consider first and foremost, as you have to choose a specific area to ensure the trading platform.
The market is constantly growing; meanwhile, the list of crypto-friendly countries is not long enough. The following jurisdictions are the best from the point of view of obtaining a crypto license:
- Malta: Applicants must set up a company in Malta and have a registered capital of at least €70,000. A license costs about €30,000.
- Estonia: The home to several European crypto exchanges, needs new players to establish some business and then apply to the FSAEE. The needed relevant documents are a founding certificate, a KYC certificate, and documents for risk assessment. A license costs 3,300 €.
- Great Britain: To obtain a license in the UK, applicants must start opening bank account for the crypto transactions, a company and prove that their activities comply with AML and KYC guidelines. A license is to cost from 15,000 €.
In addition, beginners can also obtain licenses from Japan, New Zealand, the USA, and other crypto-friendly countries, with each jurisdiction having its requirements and pitfalls.
Obtaining a crypto license
If you want to build a cryptocurrency exchange, take a look at the steps required to obtain a license:
- Select a country and run your company there.
- Open a company account in a banking institution.
- Review the necessary documents to prepare the papers.
- Regulators check whether a company meets the requirements.
- Pay the prescribed fees.
- Obtain the crypto license, which allows different trading platforms to provide various crypto-related services.
Effective and efficient alternative
If you want to set up a cryptocurrency exchange, the license is one of the factors responsible for success. In the meantime, no matter how experienced and professional, a license requires deeper knowledge and a deep understanding of legal issues.
