Unlicensed cryptocurrency businesses can’t operate. Many blockchain enterprises trade cryptocurrency. As a unique payment mechanism, legitimate cryptocurrency exchanges need a forex broker license.
Cryptocurrency licensing needs two permits:
- virtual wallet services;
- virtual money trading.
When a license is not required to trade cryptocurrency?
Different agencies license firms nowadays. In Estonia, the Bureau for Combating Money Laundering issues cryptocurrency exchange licenses (Financial Intelligence Unit). Different nations see cryptocurrencies differently.
In regulated countries, you may get a license from one of the following:
- a securities market regulator;
- a governmental agency specializing in regulating the volume of cryptocurrency transactions.
Such exchanges need no license. For further information, contact our company’s management.
Cryptocurrency license requirements
Depending on the company’s future activity, the needed paperwork for a license may vary.
- When exchanging cryptocurrency for money, a license is necessary.
- Creating bitcoin wallets requires a license for holding or transferring cryptocurrency. This permission lets the organization produce and keeps customers’ wallet access keys.
For example, in Estonia, you’ll need several papers, including:
- Resume and business owner’s phone, postal, and email addresses; legal address and website information;
- Name and contact information of the applicant;
- Full name, passport number, birthplace, and address of the recipient; personal and contact data of the AML Officer.
Additionally, you must give a certificate of no criminal history. The paper must be less than three months old. Please be aware that in certain countries where the certificate is issued, it may be necessary to apostille it.
Please note that the foregoing only applies to Estonian businesses. This jurisdiction is used as an example since Estonia is one of the most technologically advanced nations. It is also the first European Union member state to regulate the issue and trade of cryptocurrencies.
Licensed cryptocurrency exchanges and their characteristics
VAT exemption applies if you want to get a license for the trading of cryptocurrencies in a nation where this problem is not controlled by government authorities. However, cryptocurrency exchange licenses do not exempt businesses from paying additional taxes:
- when paying dividends;
- when paying social;
- when paying income and so on.
Taxes and accounting are similar. If bitcoin is regulated in the nation, the regulatory agency may require information regarding the company’s present actions.
How long does cryptocurrency licensing take?
The periods for licensing a corporation depend on several things, from the regulation of bitcoin activities in a given country to the list of needed papers.
An average license application review takes 30 days. The regulator may require extra information or papers, which may extend the license application process.
Two factors make it hard to get a cryptocurrency exchange license today:
- In countries without cryptocurrency legislation, no license is needed.
- If a nation has a cryptocurrency regulator, obtaining a license will be deemed fraud, leading to penalties and criminal charges. Buying a licensed corporation and re-registering it to a new owner is not illegal.
Law firm Fintech Consulting provides services for acquiring a cryptocurrency exchange license: advice, legal services, document preparation, and licensing assistance. In certain nations, cryptocurrency exchange licenses may be obtained remotely.