Anonymity and decentralization are still among the main advantages of crypto. Meanwhile, the cryptocurrency sector is gradually emerging from the shadows.
The industry is becoming a promising alternative as governments try to put it in a regulatory environment. All this suggests that the future of the crypto sector will be associated with the licensing of trading platforms.
Let’s take a closer look at the nuances of obtaining a license, as well as possible pitfalls you may face.
Why Obtain a License?
Obtaining a license is a vital step in attracting a wide range of traders and investors. Licensed operators position themselves as platforms with the highest level of protection and a clear regulatory policy. These policies often take into account not only local but also international legal regulations.
Meanwhile, unlicensed ones do not provide even minimal guarantees that users’ personal and financial data will not become available to third parties. As a result, government agencies design and implement stringent measures to eliminate the slightest likelihood of financial fraud.
The first things that come to mind when it comes to the regulation of crypto exchanges are AML (Anti-Money Laundering) and KYC (Know Your Client) verification procedures.
Licensed and trustworthy exchanges require their clients to go through the AML/KYC right after registering an account. For this reason, many novice investors and traders trust exclusively to licensed crypto exchanges as they can weed out scammers and guarantee the safety of funds.
Where to get a license?
FACT! Licenses are one of the most critical elements of a successful crypto exchange. Now it’s time to decide on jurisdiction – the loyal one.
Keep in mind that the growing popularity of the crypto market does not mean that absolutely all countries are ready to open their arms and issue you a license.
Therefore, it is worth considering jurisdictions that offer relatively simple licensing procedures. The list of such countries includes, but is not limited to:
Malta. The cost of obtaining a license is €30,000. However, this is far from the only requirement that should be taken into account. The minimum share capital of a company must be €730,000 or more.
Estonia. Most European crypto exchanges consider Estonia as heaven on earth when it comes to obtaining a license. To get started, you need to submit documents to the Finantsinspektsioon (FSAEE) – the government regulator.
The list of docs includes a certificate of state registration, a valid KYC certificate, and a documented risk assessment. The license cost is the icing on the cake – €3,300 and not a cent more.
Great Britain. Obtaining a license for a cryptocurrency exchange looks like an effortless and straightforward procedure here. You will need to register a company, open a corporate bank account for crypto transactions and provide documentary evidence that your business activities will fully comply with AML and KYC policies. The license price starts at €15,000.
This is not a complete list of countries offering honorable conditions and simple procedures for obtaining a license. Moreover, getting a license involves preparing and providing a wide range of documents, taking into account the legislative norms of a particular country.
Profit Center FX is the best alternative for organizing your own crypto exchange in the shortest possible time. The company offers specialized software and can help crypto business owners move to the next level without the hassle and cost.