How Do I Get A Crypto Trading License?

• Pooja Negi
• 17 Nov 2022

Did it frustrate you when you couldn't find a single piece of documentation that answered all of your queries about crypto trading licenses? Well, it annoyed us too!

With the ever-increasing usage of cryptocurrency, various cryptocurrency laws and license standards are being put into place by governments around the world. The cryptocurrency landscape is constantly changing and keeping up to date with the rules and license requirements in different global territories can be difficult, to say the least. Fortunately, we can assist you to stay current. 

What are the steps that need to be followed to acquire a crypto trading license? What are the requirements? Who can help out in getting these crypto trading licenses? We'll help you with all of these queries. Let's get going.

Why Do You Need A Crypto Trading License?

If you conduct cryptocurrency business in a country that needs a license and you do not have one, you may face fines and other consequences. Even if your firm is registered in a jurisdiction where a crypto license is not required, you might face some restrictions. For example, you may encounter issues exchanging crypto for fiat currencies and interacting with counterparties registered in countries where a crypto license is necessary. Furthermore, an unauthorized business will have difficulty opening an account with a foreign bank! 

You go through the know-your-customer (KYC) and anti-money laundering (AML) processes when applying for a cryptocurrency license. As a result, having a license will increase your company's trustworthiness in the eyes of your clients, partners, and financial regulators. A licensed cryptocurrency business can freely trade crypto for fiat money, exchange one cryptocurrency for another, manage its clients' digital money, perform transfers from one crypto wallet to another, accept crypto payments for products and services, function as a middleman, and so on.

But when is a crypto trading license mandatory? If you intend to exchange Bitcoins, Ethers, or stable coins for dollars, euros, pounds, or other fiat currencies, you must obtain a crypto license. You should do the same if you desire to manage third-party digital money. A license is also required if you intend to issue your own tokens and/or launch an ICO.

How To Acquire A Crypto Trading License Across The World?

The regulations and licensing procedures for cryptocurrencies vary from nation to nation. Each country that permits cryptocurrency-related businesses to operate imposes its own requirements, which can include the following:

• Given company's ownership structure, beneficial owners, directors, and legal address;
• Type of tokens getting traded.
• Size and liquidity of the company's capital and more

Every country has different state obligations, application processing periods, and necessary application document packages. In general, the application procedure for a cryptocurrency license is split into the following steps:

There are a few things you'll need to do in order to get your cryptocurrency company up and running: 

• First, you'll need to choose which jurisdiction you want your company to be based in. Make sure to research the different options and choose the one that makes the most sense for your business. 
• Once you've decided on a jurisdiction, you'll need to open a business bank account there. Again, do your research and make sure you choose a reliable bank that will meet your needs. 
• Next, you'll need to hire some staff. Make sure to carefully screen candidates and find employees that are a good fit for your company. 
• Once you have your team in place, you'll need to acquire the hardware and software you need to get up and running. This may include computers, printers, scanners, etc. 
• Finally, you'll need to prepare and submit your application document package. This will include all of the necessary paperwork required by the jurisdiction in which you're based.

Depending on the country, application processing times range from two to six months. When deciding where you want your cryptocurrency firm to be registered, you must carefully examine the country's AML regulations. In some countries, cryptocurrency licenses are categorized. Depending on the type of license you have, you can engage in one or more of the following cryptocurrency operations: making and receiving cryptocurrency payments, performing crypto transactions on behalf of third parties, managing crypto portfolios, keeping clients' digital money in their accounts, working at crypto exchanges, investing cryptocurrencies, and providing investment advice.

Let’s check the requirements to get a crypto trading license in various countries.

1. The USA

Requirements

1) The company applying for a cryptocurrency license in the country has to comply with strict AML/KYC requirements;

2) A local AML officer must be appointed to ensure compliance.

Documents Required

1) A detailed business plan

2) An extract from the Registry and company By-laws

3) A clean criminal record

4) Information about corporate bank accounts

Time Frame for License Approval - 14 days

Cost (in USD) - 7,000

 

2. The UK

Requirements

1) At least one director of the company must be a British resident.

2) The company applying for a cryptocurrency license must comply with strict anti-money laundering requirements.

Documents Required

1) The local company representative's ID

2) The corporate documents

3) The confirmation of the legality of sources of income
 

Time Frame for License Approval - from 3 months

Cost (in USD) - from 15,000

 

3. Japan

Requirements

1. At least one director of the company must be a Japanese resident.

2. The company's registered legal address must be in Japan.

3. A charter capital of at least 90,000 USD.

Documents Required

1) Passports for owners and directors

2) A thorough business plan

3) Anti-money laundering policies description
 

Time Frame for License Approval - 6 months

Cost (in USD) - from 30,000

 

4. Hong Kong

Requirements

1) Having an office in the jurisdiction 

2) Appoint a local AML officer

3) Not having any requirements for the charter capital.

Documents Required

1) Corporate documents - this helps to establish your business and protect your interests

2) Business plan - this is essential in order to map out your company's growth and development over several years

3) Company owners' personal documents - these will be required in order to prove your involvement and commitment to the business

4) Office rent agreement - this is necessary in order to secure your office space and begin operations.

Time Frame for License Approval - from 3 to 5 months

Cost (in USD) - 15,000 – 35,000

 

5. Singapore

Requirements

1. The company's charter capital must be at least 166,000 USD

2. There must be two local directors on the staff

3. The directors must have a minimum of two years of experience in the business.

Documents Required

1) The corporate bank account information

2) The corporate documents

3) A detailed business plan

Time Frame for License Approval - 6 months

Cost (in USD) - 30,000

 

6. New Zealand

Requirements

1) A registered office in the country

2) Internal rules and procedures that exclude fraud

3) State duties for each type of crypto operation

4) Clean criminal records for company owners and directors.

Documents Required

1. Copies of necessary documents from the local Registry

2. Finely ordered corporate documents

3. A comprehensive business plan

Time Frame for License Approval - 30 days

Cost (in USD) - 15,000

 

7. Switzerland

Requirements

1. AML/CFT Reporting

2. Ensure the security of clients' money

3. Maintain a charter capital of 100,000 USD

Documents Required

1. Corporate documents

2. Confirmation of legality of sources of income

3. Business plan for a few years

Time Frame for License Approval - 90 days

Cost (in USD) - from 15,000

 

8. Estonia

Requirements

1. At least one of the company directors must be a resident of Estonia

2. The company must have a minimum capital of 12,000 USD

3. The company must have an AML officer on staff

4. The company must have a registered legal address in Estonia.

Documents Required

1) A precise business plan

2) A extract from the Registry and company By-laws

3) A clean criminal record and

4) Details about corporate bank accounts.

Time Frame for License Approval - from 2 months

Cost (in USD) - from 20,000
 

Various countries are set to begin giving cryptocurrency licenses, so you'll have more options in the near future. 

But, wait. What about India?

The lack of formal licensing criteria for cryptocurrency exchanges operating in India has been a godsend for early adopters of the business model. Currently, crypto exchanges must receive customary permits from the authorities in order to conduct crypto business in India, in a way comparable to the approach of establishing any type of company, in compliance with the Companies Act, 2013, and its underlying laws. Consequently, cryptocurrency exchanges must get tax-related approvals and registrations from the appropriate tax authorities. 

To run a crypto business, the business will need to obtain the following:

• Permanent Account Number (PAN)
• Tax Deduction and Collection Account Number (TAN) 
• Goods and Services Identification Account Number (GSTIN) and more

However, from the standpoint of India, the legal situation regarding crypto is still unclear. Every country is in a state of perplexity about how to handle cryptocurrencies. To begin with, there is no explicit law/regulation/licensing requirement that applies to crypto exchanges/businesses operating in India. Dealing with cryptocurrencies is currently neither prohibited nor legal. With the establishment of a new crypto tax system in India, it is highly anticipated that the government would shortly adopt new regulations/laws governing crypto transactions. Only time will tell!

Closing Thoughts

Whether you are another crypto geek or a genuine entrepreneur looking forward to stepping into the crypto world with a newfangled crypto trading platform, a crypto license is inevitable. This article may have provided you with some insight into the varying criteria for obtaining a crypto license throughout the world. However, one question remains unresolved. Who can assist you in obtaining this valuable crypto trading license? The answer is quite clear. There are presently a number of legitimate firms offering world-class assistance in obtaining crypto licenses as well as in launching white label crypto exchange platforms. One such firm is Clarisco Solutions. All you gotta do is drop us a message. We will take care of the rest. 

If you want to get a Crypto Trading License first you have to get the knowledge from Best Cryptocurrency Exchange Legal Advisers.

Get started today!