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To start a cryptocurrency exchange, getting a crypto-currency trading license is essential. The process is always associated with a number of questions and legal aspects to adhere to:
What is a trading license? How can you get it on your own? What are the main peculiarities of getting such a license? How do such peculiarities vary from country to country? This article will be helpful for those people who want to form a basic overview of the process. Legal consultants can advise precisely on certain peculiarities and formalities that exist in each country you may consider for launching a business there.
What is a cryptocurrency trading license?
A cryptocurrency trading license is mandatory for a business setup and to proceed with a cryptocurrency exchange endeavor. A person needs to get a license first. The method requires jurisdiction for proceeding further from the company you are going to operate from. To operate a cryptocurrency exchange you need a license that grants permission to you to deal with digital equity. Also, if you want to trade in security tokens, you may need special permission to deal with fiat currencies and a license to deal in securities.
It is proposed that a single integrated license such as the Kazakhstan Financial Services license is acquired. This license allows you to operate any of the following services:
- Bitcoin (cryptocurrency) over the Counter Exchange
- cryptocurrency exchange
- Securities Token (STO) Exchange
- Forex conversion services
These are approximate types we would like to shortlist here as examples only. The exact list of license types may vary depending on the country. Such should be considered on a case-by-case basis.
How to get a cryptocurrency exchange license
Getting a cryptocurrency exchange license has become a complicated and time taking procedure. It demands a certain experience and complete preparation from the client.
As of today, only a few countries in the world are exuding cryptocurrency exchange licenses like UAE, Japan, Labuan, Hong Kong, Estonia, UK, Singapore, and the USA.
Types of License to exchange cryptocurrencies
Cryptocurrencies exchanges may be conditionally divided into two categories:
Classical cryptocurrency exchanges: it grants permission to exchange cryptocurrencies exclusively from one to another.
Fiat cryptocurrency exchanges. That grants permission to exchange fiat currencies to cryptocurrency, and vice versa.
Types of cryptocurrency registration
We will also tell you about the types of cryptocurrency acquiescence so you will get a better idea of the registration process. Before moving further, identify the goals and needs you want to perform then accordingly choose the cryptocurrency license. There are 2 types of cryptocurrency acquiescence:
Cryptocurrency exchange operator –
The exchange of cryptocurrency has to the client’s name for the commission fee.
Cryptocurrency depository wallet operator –
For client’s cryptocurrency depository wallet management.
The steps of licensing the cryptocurrency exchanges
You should follow these basic and approximate steps to obtain a license:
Company registration in the chosen jurisdiction. It should be considered that many companies with shared functions are included in the structure of top crypto trading exchanges.
In working businesses, accounts should be open for a list of demands.
Hiring employees who can perform special tasks such as:
an AML(anti-money laundering) officer;
compliance - the officer who will be responsible for fulfilling legal requirements.
Equipped with important technical equipment and software.
Collect all the important information and required documents for operating the activity.
Till now, you became aware of getting a license. Involving a professional cryptocurrency exchange development company that provides you end-to-end services from development to achieving license & Marketing may be the best choice for starting a crypto business. These types of companies will not only save your time & money but also help you to get your exchange fully regulated.
How to establish a cryptocurrency exchange
You are planning to make your exchange, a license would be your priority. Either you want to grow your business globally or just want to make it limited to your region or country, you need essential licensing and approvals for starting a Bitcoin exchange according to the area you selected for operation. Seek legal advice regarding Bitcoin according to local laws. Experts advice will be helpful to prevent you from problems.
Evaluate the regulations and consent requirements of the country
Integrate a suitable customer verification procedure in your exchange to make it legally appropriate. Sometimes this is a core requirement for operating with cryptos in certain countries. All governments need establishments that are involved in the currency exchange business to stick to the apprehend. To demoralize money laundering, verify the customer ID cards or passports for making their participation legal. It will retain you from getting into trouble in the future.
Establishment of customer support services
For a successful exchange, customer care plays a vital role. You should hire a group of people who provide customer care services 24/7 and listen to the complaints of customers and try to resolve their problems as soon as possible. Good customer care ensures that they start trading and generating gains for your exchange.
Excellent Security for Transactions and Customer Data protection
Customers need satisfaction that their important information, money, and bank details are in safe hands. This needs top security updates to ensure that operator’s and trader’s funds are secure. In an old incident, Bitcoins were being stolen. According to a Reuters report, 1/3rd of all Bitcoin exchanges from 2009 till 2015 were hacked. Hence proved that security must be the priority in your exchange setup.
Associate with a bank or a payment procedure
Make a partnership with a trusted bank that has good online hosting facilities. Banks associated with your exchange must-have instant bank transactions online. It will be convenient for your customers. Banks must have a fast clearance of funds and settlement methods.
Conclusion
Hope this article will help you to get the desired information you are wondering about. We tried our best to cover all aspects of how to get the Bitcoin exchange license and its further proceeding methods. For further queries and suggestions please comment below or reach us with your consultation requests.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.