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By Denys Chernyshov
To work with blockchain technologies, a firm must have official permission called a crypto-license. This license, which is in accordance with the IT legislation of a particular jurisdiction, makes it possible to conduct a crypto-business. Since crypto-currency began to be recognized as an international asset, it has become attractive to entrepreneurs. Accordingly, entrepreneurs began to actively look for market-space for conducting this type of business activity. Having understood the global trend towards the strengthening and spread of crypto-currencies, Spain began to interact with this area and support it in every possible way.
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Understanding the Regulatory Landscape
Crypto-regulation in this jurisdiction is quite interesting and worth attention. In Spain, there isn’t legislation clearly regulating the movement of crypto-currencies and digital assets. There aren’t similar bills in development.
In 2018, the Central Bank and the CNMV (local regulatory commission) issued a decree on the dangers of investing and trading in digital assets. Simultaneously, a clear definition of the meaning of cryptocurrency isn’t specified, but ICO is described in detail.
Local legislation doesn’t consider virtual currency as a financial tool. Such currencies may have the status of securities in the case of a public offering or the status of a commodity in the case of an individual sale.
Types of Crypto-Licenses
The crypto-currency business is one of the most important trends of the first half of our century (at least), this is already obvious. A crypto-license is an official permission to work with virtual assets. Such legalization of crypto-business protects users’ crypto-assets. They trust such a company and use its services. In addition, having received a crypto-license, your company will be able to exchange virtual money for fiat money legally , exchange different types of crypto for each other, store digital funds of clients, make transfers between two crypto-wallets, place tokens, issue digital currency, etc.
In almost every jurisdiction there are incubator programs for crypto-projects, various associations, and in general there is a developed crypto-community. In general, there are four types of licenses related to working with cryptocurrency. However, categorization may differ depending on the country chosen by the entrepreneur.
- Classic. Firms that are holders of this permit have the right to change crypto-currency for a commission.
- Fiat. Firms that are holders of this permit have the right to exchange crypto-currency and fiat and back for a commission.
- Traditional. Firms that are holders of this permit have the right to change currencies of all types for a commission.
- Specialized. Firms that are holders of this permit have the right to provide services for the creation and storage of crypto-wallets and client keys.
Application Process
The complexity of the process of obtaining a crypto-license depends on the legislation and regulations of crypto-transactions regulators in each individual country. The applicant company must meet certain requirements for the size and liquidity of the authorized capital, the organizational and legal form of the business, the beneficiaries and founders of the company, its legal address, and a crypto-account.
To get this type of permit, the following is required.
- Registration of a legal entity - Sociedad Limitada (SL) (similar to LLC).
- Having an actual office in Spain.
- Proof of no criminal record among the company’s shareholders. This is a very important indicator in this industry.
- Detailed business plan and explanation of profit sources
- Opening an account with the Central Bank and a separate permit to work on the open virtual currency-market.
- Employees must have experience working in the crypto-sphere.
- Compliance with the AML Law in Spain.
Income up to 6,000 euros is taxed at a rate of 19%, from 6,000 to 50,000 euros it’s 21%, from 50,000 euros it’s 23%, and income above 200,000 euros it’s 26%.
Compliance and Ongoing Obligations
Spanish law basis regarding money laundering directly applies to companies involved in electronic money, currency exchanges, and transfers. All participants can freely trade or exchange digital currency, which makes them subject to supervision.
AML legislation requirements also apply to legal entities offering blockchain-based services for servicing and transferring crypto-currencies. In 2021, Spain approved changes to its legislation in accordance with the requirements of AMLD5. After the new crypto-exchange rule basis came into force, e-wallet providers were required to register and obtain the license from the Central Bank of Spain.
When applying for this type of activity, the company must meet several regulatory parameters. The standard local list of rules, regulations and standards looks like below.
- The director and shareholder must not have a criminal record.
- Information about the person responsible for compliance with AML-regulation must be reported to the local Financial Analysis Department.
After obtaining a crypto-license, the licensee is required to submit relevant reports to the relevant authorities. In case of an error or refusal, the activity permit may be suspended without the possibility of obtaining a new one, since such a company will be considered fraudulent.
Future of Crypto-Licensing in Spain
Spanish authorities have said that digital currencies are not securities, but acknowledged that supply and commercialization could have an impact on investment laws. However, Spain not only allows transactions with crypto-assets, but is also favorable to creating businesses in this area. Crypto-companies today registered in this jurisdiction bring decent income to their owners and also add promising opportunities for attracting investments and new clients.
In Spain there isn’t specific regulation of platforms for virtual currencies or dealing with any crypto-asset. The CNMV believes that if assets traded on an exchange are not considered financial instruments, then at a minimum they should be subject to rule basis related to storage, registration, and management of conflicts of interest between clients. At the same time, the Spanish government and financial apparatus are working hard to provide perfect security and protect the crypto-sphere as much as possible, developing and progressing it.
Our specialists will become your reliable allies on the path of your commercial development. We have been achieving the most effective results for our clients for many years. A guarantee of the high professionalism of our team are thousands of satisfied entrepreneurs who now turn only to us.
Author Bio
Denys Chernyshov is founder and CEO of globally-famous organization Eternity Law International.
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.