Cryptocurrencies have already become the essential parts of our lives, making them much easier. Fast and straightforward transactions and multiple opportunities to raise funds globally – don’t these mere points sound good?
If you want to earn on a larger scale from crypto deals, you will more likely need to get a crypto exchange license. It will allow you to go far and beyond trading. In this article, we will review the nuts and bolts of crypto licensing. Please note that the requirements vary from country to country. If you have some specific ones in mind, feel free to discuss them with Fintech Harbor lawyers.
What Is a Crypto License and Which Benefits Does It Provide?
A crypto license is an official authorization from the state authorities that allows crypto companies to carry out legal operations with cryptocurrencies and other virtual assets.
Depending on the type of specific license, a company may be authorized to conduct different types of operations:
- store different currencies on behalf of the customers;
- exchange different virtual assets and cryptos for fiat currencies and vice versa;
- transfer virtual currencies;
- create and maintain accounts associated with cryptocurrencies and other virtual assets;
- promote crypto projects;
- create and manage DeFi platforms;
- provide advisory services related to cryptos and investments;
- carry out NFT issuance and further trading
- tokenize real-world assets.
Given the dynamic nature of the crypto world, the scope and nature of virtual assets and transactions with their involvement subject to licensing is defined by the laws of a specific jurisdiction. If you have some in mind already and want to know for sure about the licensing terms in your case, Fintech Harbor lawyers are ready to consult you in detail. From our practice and perspective, we recommend take a look at jurisdictions with the friendliest terms of doing business with cryptos, for instance, the UK, Lithuania, Estonia, Canada, and Poland. Let’s discuss workable options taking into account the specific background of your business case.
Benefits of Getting a Crypto License
Probably, the most important reason behind getting a crypto license is to prevent any possible legal problems, like fines or even criminal liability in certain cases. Having a crypto license is obligatory under specific terms. However, aside from that, it is beneficial to have a crypto license for many other reasons:
- Reliability. Any crypto license adds credibility to a business, making it trustworthy for customers. They would rather prefer licensed providers rather than non-licensed ones. The latter will more likely be associated with greater unreasonable risks.
- Relationships with banks. The official authorization makes it easier for crypto companies to enjoy traditional banking services and, respectively, expand the range of their operations.
- Business growth. This is a direct consequence of operating in the legal environment. If a company has a license, it can easily expand its business, including globally.
- Attracting investments. A valid crypto license is a must-have point for many investors. Without it, any other arguments to persuade investors will not work. When a crypto license is in place, this aspect greatly increases investor confidence.
Challenges Associated with Getting a Crypto License
It is no secret that getting a crypto license is a challenging endeavor for several main reasons:
- Tough compliance requirements. Since cryptos are associated with money, sometimes huge, the compliance standards have to be appropriate. It is essential to understand and meet these standards to get a crypto license in the end. Professional help may be needed in this case, especially when countries with high compliance standards are involved. Switzerland is a good example. If you consider it or any other similar reputable jurisdiction, professional help will be definitely needed to comply with the applicable standards.
- Dynamic environment and, respectively, rules. The crypto market is very dynamic with quite dense competition. This results in quite dynamic rules as well. If you want to remain in touch with the environment, keep track of the updates or review the materials provided by experts who work with these matters permanently.
- Financial monitoring and checks. No need to deny that any crypto transactions are inevitably associated with risks. That is why they are watched closely. Aside from the licensing, there are also numerous identity and anti-money laundering checks.
- Security. Many countries have strict data privacy standards, the EU and Switzerland, are good examples. However, exactly these strict standards help to protect customers’ rights and prevent any possible fraud.
Crypto Licensing: Average Costs
Getting a crypto license is a bit costly but rewarding. In most countries, the costs for obtaining it vary approximately around $5,000. In some well-developed countries, like Canada, for instance, obtaining a crypto license may cost around $18,000.
These costs usually cover the statutory capital, paying registration fees, arranging notarization, and other services. Extra costs may be in place on a case-by-case basis. If you want to register your crypto company in a specific jurisdiction, contact professional lawyers to find out how much this will cost you.
Enter a Market Smoothly: Get a Crypto License for Your Business Easily!
Licensing is a must-have step and a challenge that is possible to overcome smoothly. The experience of Fintech Harbor lawyers proves that. We have vast expertise in obtaining crypto licenses across numerous jurisdictions, including ones with the toughest standards.
We are ready to access your case individually and offer the most workable registration solution in your case. Our lawyers are ready to help you, collect and file all the necessary documents, elaborate on required policies and documents, help with passing financial monitoring and other checks, etc.
If you need help with overcoming really challenging and non-standard situations, you are welcomed to contact us. Let us know what your business or problem is. We will help you with it instantly, helping to focus majorly on growing your business!