In the high changing risks of legal conditions involved in the functioning of cryptocurrencies, it is vital to adhere to the requirements of the legislation and regulate the activity in the framework of the law. It is here that the crypto licensing consulting comes in. The regulation is a complex and sometimes an oversaturated system where most of the fine details are not simple to comprehend without proper training. This blog shall discuss crypto licensing consulting in detail which includes its significance, guiding factors during the process, and how a consulting firm can assist in the acquiring of the licenses for your crypto business. 

Various Aspects Of Crypto Licensing

The use of cryptocurrencies and blockchain technology has now redefined the traditional approaches to finance by offering new methods of conducting transactions and fundraising, as well as protecting digital assets. But, when there is innovation, there will always be some or rather certain level of regulation. Obtaining the proper licenses is crucial for several reasons:

Legal Compliance: Failure to obtain the right licenses cause serious legal measures that include fines, closure and criminal prosecution. Licensing helps a business to avoid violation of laws of the country and state in which the business is established. 

Investor Confidence: It will be easier for a business dealing in cryptocurrencies to attract investors if it is licensed as this shows that it operates within the law and exercises decency when dealing in its operations. 

Market Access: Crypto markets demand certain licenses to be obtained for operation in those particular regions. Without these, your business may be prohibited by your economic and business laws from penetrating other prospective and probably more profitable markets. 

Security and Trust: This process generally entails a stringent examination of the business management processes to guarantee adequate security mechanisms. This action helps in establishing confidence from the users and other stakeholders. 

The Crypto Regulatory In Different Places

United States: The regulation of cryptocurrencies in the US is convoluted. Some of the regulators are:

Security and Exchange Commission – SEC

Commodity Futures Trading Commission – CFTC 

Financial Crimes Enforcement Network – FinCEN

Money Transmitter License -MTL

Money Services Business – MSB 

European Union: The EU has regulation on cryptocurrencies. 5AMLD uses AML and CTF practices. Markets in Crypto-Assets (MiCA) is expected to be launched in the future.

Asia: Japan and Singapore are among the countries that have provided clear structures of regulations on this. Japan’s Financial Services Agency (FSA) currently demands exchanges operating in the country to register and follow some of the strict AML plus cybersecurity standards. Payment Services Act in Singapore regulates various operational activities of several companies that engage in different cryptocurrency services such as exchanges and wallets. 

Other Regions: Most of the famous liberal laws that support the cryptocurrency emanate from countries such as Malta, Switzerland, and Gibraltar. But, some countries such as China and India have set very many constraints on the use of cryptocurrencies. 

Factors To Be Looked At When Considering Crypto Licensing:

Securing the necessary licenses for a crypto business involves several critical steps and considerations:

Regulatory Research: The first is to ascertain the exact laws of the land of your choice jurisdictions on the subject or matter in question. This covers the need to determine the different licenses that may be needed and the regulatory measures that go with each. 

Business Model Alignment: Depending on the business model you will need different types of licenses. For instance, the license needed for a crypto exchange will not be the same as that needed for a wallet or a DeFi firm. 

Application Preparation: The preparation of the application should be very proper and accurate. Affiliates have to disclose substantial information about the business, its security measures, and policies for clients’ identification and fight against money laundering. 

Compliance Infrastructure: One of the key steps is to build a strong unadjusted compliance program. This involves following procedures in AML and CFT, carrying out frequency audits and having Clean records. 

Our Comprehensive Crypto Licensing Consulting Services

Our team of specialists understands the specificities of the crypto regulations and licensing plans of different countries. Here’s how we can help:

1. The Recommended Research Approach Includes Both The Regulatory Analysis and Compliance Strategy.

It must be noted that knowing the regulatory environment is a beginning in the right direction as far as licenses are concerned. Thus, the consultants carry out comprehensive reviews of the available legal systems in different areas to let companies choose the right places for their activities. We establish compliance solutions that are unique to your organization. The factor in your strategic plans must make sure they do not violate any law or regulation. 

2. Licensing Application Support

The process of applying for a license can be daunting. Our consultants’ services range from gathering the required documents to dealing with the regulatory bodies. This way being the guiding process, you are helped to complete your application, verify all information and submit it in due time. 

3. Risk Management

Risk management is an important concept within the crypto environment. We thus perform risk analysis to analyze areas of risk or weakness in the business operations of the clients. Our consultants assist to put in risk management structures so that your enterprise is protected and in compliance.

4. AML/KYC Compliance

AML and KYC requirements are inherent in crypto licensing as they are confidential and regulatory sensitive information. We help to create and adopt the most efficient AML/KYC frameworks that will help your company to adhere to all the legal norms and avoid the legalization of criminal money.

5. Compliance Support

It is relevant to underline that regulations are a dynamic subject that does not allow for the achievement of permanent compliance. Our services are perpetual to help you maintain status with fresh changes in the regulations. Our consultants perform periodic reviews, audits, and training to make sure clients’ compliance solutions are always optimized. 

List Of Crypto Licensing Platform We Support:

• Crypto Exchanges 
• Crypto Wallets 
• NFT Marketplaces 
• Web3 Gaming 
• Crypto Payment Gateways 
• Crypto Lending Platforms 
• DeFi Platforms 
• STO Platforms 
• ICO Platforms 
• Crypto Asset Management Services
  

Procedure For Obtaining A Crypto License

Step 1: Find the Crypto License Requirements

Choose the region and cryptocurrency license that best suits your business model, considering your planned activities and customer base. Understand the license requirements, including paid-up capital, local economic substance criteria, timeframes, and regulations.

Step 2: Entity Formation & Registration

Perform research on the upper management and shareholders. With the KYC documents, incorporation documents, power of attorney, register the company with the local Companies Registry. Using registration corporate documents, the Certificate of Incorporation, Memorandum and Articles of Association are issued. 

Step 3: Create a business bank account

Open an account with a reputable bank to enable the company to transact its business through it. Put the minimum paid-up capital that is required for the license into this bank account. 

Step 4: Documents Preparation

Prepare the required documents like business plan, financial statements, AML policy, and insurance policy. Review and e-sign these documents before proceeding with the license application.

Step 5: Meeting Local Economic Substance Requirements

Ensure compliance with local economic substance requirements, such as having a local registered address and approved suitable persons. Recruit local qualified employees, including a compliance officer, and prepare employment contracts. Choose a physical office, considering factors like rental cost, location, and size, and execute the lease agreement.

Step 6: License Application Filing

Submit the application to the local regulator. Attend an interview with the regulator if required and prepare for follow-up actions. Upon approval, receive the cryptocurrency license and start business operations within the stipulated time frame to maintain the license.

Conclusion:

If you are a new player in the crypto market and you want to expand your business, or an old player who has decided to invade this market, Bidbits is for you. Bidbits offers the best Crypto licensing consulting services. Crypto licensing consulting is a set of services aimed at offering you necessary assistance and guidance concerning licensing within the chosen area. Let us know how we can help you reach your crypto licensing objectives, and let us deal with the rest. We can demystify everything that lies ahead of the cryptocurrency and propel your business to the right direction.