Who needs a crypto license?

Whether you need a crypto license depends on the regulations and requirements of the country where your business is based or provides services. Usually, if your business deals with digital currencies, you might have to get a virtual asset service provider license, or hereafter VASP license, to work and provide services legally. Here is a list of services and business that needs a crypto license in different jurisdictions:

Crypto exchanges:

Platforms where you can buy, sell or trade cryptocurrencies for another virtual currency or fiat money.

P2P trading:

Peer to Peer trading directly with each other without a middleman.

Token legalization, ICO (Initial Coin Offerings) and Token Sales:

Companies raising funds through the sale of digital tokens may need to register their offering and obtain a crypto license, especially if the tokens are considered securities.

Custody services:

Wallet services, Companies that provide ways to keep cryptocurrencies safe. Some wallet services are custodial, meaning the company keeps the cryptocurrency for you, while others are non-custodial, giving you software to look after your own cryptocurrency.

Crypto ATM:

Businesses that run machines where you can buy or sell cryptocurrencies often need to get vasp license in a lot of places.

Cryptocurrency Mining Operations:

Some jurisdictions require mining operations to be licensed, particularly if they are of significant size, due to their high energy consumption and potential tax implications.

Crypto Payment Processors:

Services that allow merchants to accept payments in cryptocurrency must often be licensed as money transmitters.

Crypto Hedge Funds and Investment Platforms:

Funds and platforms that invest in cryptocurrencies or related products on behalf of investors might need to register as investment vehicles and obtain the appropriate licenses.

Securing your Crypto License

Securing a crypto license is essential for legally providing a range of services in the cryptocurrency space, including the trade, sale, and exchange of fiat to crypto, crypto to fiat, and crypto to another cryptocurrency. It also covers the storage of client crypto funds and the transfer of virtual currency between wallets globally.

While the European Parliament’s 2023 passage of MiCa (Markets in Crypto-Assets) regulations marked a significant step in formalizing crypto operations within Europe, it’s important to consider both global and regional regulatory frameworks. MiCa, created by the European Commission, primarily oversees markets dealing with crypto assets and related services not previously covered by European laws. Although it sets a baseline, existing national regulations within EU countries can complement or impose additional requirements on crypto service providers, such as share capital contributions, local staffing, or office presence.

Mainly all EU jurisdictions have pretty similar laws to comply with, concerning AML/CFT policies, KYC, however there are significant differences concerning requirements of the jurisdiction, such as contribution of share capital, local substance of employees or office, or its absence.

Beyond Europe, various jurisdictions around the world have their own sets of regulations tailored to the local economic and legal landscape, which might differ significantly in terms of AML/CFT policies, KYC requirements, and other operational obligations. When choosing a jurisdiction for obtaining a crypto license, it’s crucial to assess the comprehensive regulatory environment and the specific terms and benefits each offers.

Securing a VASP license is not only a regulatory necessity but also a strategic asset that enhances your business credibility and market access worldwide. By obtaining a crypto license, your company can ensure compliance with international financial standards and attract a broader base of clients who value security and transparency.

Choice of Jurisdiction for obtaining Crypto License

Filter By:

Czech Republic

The Czech Republic offers a robust legal framework for VASP licensing, aligning with EU regulations while providing a stable economic environment. Its strategic location in Europe and low regulatory framework make it an ideal jurisdiction for crypto businesses start-up seeking to tap into the European market, with the most fastest cryptocurrency license obtainment.

Poland

Poland is emerging as a favorable destination for crypto businesses due to its progressive regulatory approach and supportive government policies aimed at fostering innovation. With a growing tech-savvy population and competitive operational costs, Poland offers a dynamic ecosystem for companies looking to establish a presence in the European crypto space.

Slovakia

Slovakia’s growing reputation in the fintech sector is bolstered by its EU membership and adoption of Euro, offering seamless integration with European markets. The country provides a supportive environment for innovation, with specific incentives for technology and digital finance companies seeking to expand in Europe.

Lithuania

Lithuania stands out with its fast and transparent VASP licensing process, which is among the quickest and most prestigious in Europe. The country boasts a highly supportive regulatory environment for fintech companies and a thriving blockchain community, making it a top choice for businesses seeking efficient market entry and innovation opportunities.

Estonia

Estonia is renowned for its advanced digital infrastructure and was one of the first countries to offer a legal framework for cryptocurrencies. With its e-residency program and a clear tax regime, Estonia provides a highly attractive environment for crypto companies looking for stability and a forward-thinking jurisdiction.

Cyprus

Cyprus attracts crypto businesses with its favorable tax policies and strategic location at the crossroads of Europe, Asia, and Africa. The country’s EU membership and compliance with international standards provide a secure and advantageous regulatory environment for companies operating in the crypto sector.

Canada

Canada offers a well-established and clear regulatory environment for crypto businesses, backed by a strong commitment to innovation and technology. Its proactive stance on crypto regulation, combined with access to a broad North American market, makes Canada a reliable and strategic choice for obtaining a VASP license.

UAE

The UAE offers a unique value proposition with its zero-tax regime, world-class infrastructure, and strong governmental push towards blockchain technology. As a global business hub, the UAE provides unparalleled access to emerging markets and a progressive regulatory framework for crypto companies looking to establish a significant presence in the Middle East.

Making the right Choice

Picking the right crypto license can be tough decision, especially in the crypto world, where each country offers different benefits like being tax-friendly, easy to get, or cheap. So, before deciding, consider these points:

Geography of your potential customers

Where your customers are from – Some places let you operate in multiple areas with one crypto license due to similar laws, while others need a local crypto license or don’t allow such activities at all.

Prestige of your crypto license

How much your crypto license’s prestige matters – Making extra efforts can be worth it if it boosts your business’s image. Companies with well-regarded licenses are often seen as more reliable and competitive by customers and investors. Getting such a VASP license can be an easy way to enter new markets and attract more clients.

Minimum requirements

What level of rules you’re okay with following – Whether you’re just starting out or looking to grow, you need to figure out how much time, money, and people you can dedicate to meet local laws.

Potential partnership with service providers

Who your service partners will be – A common oversight is not considering your future partners in software, auditing, liquidity, banking, and payment processing. These partners often have a preferred list of crypto licenses they work with. It’s best to check with them early on if your chosen VASP license fits their policies.

Timeframes

How quickly you want to start operating – Knowing when you want to begin can help decide which crypto license is best in terms of how long it takes to get it. Some crypto licenses can be gotten in just a month, while others might take a year to be approved by regulators.

Questions & answers

How to get crypto license?

Complexity of the process depends on chosen jurisdiction, which may differ from country to country, but generally speaking, first we choose suitable jurisdiction, than open a legal entity with local legal address, complete application form, gather and register additional documentation if required (share capital, local substance, due-diligence), provide AML/KYC/CFT policies and meet the regulatory standards for your project.

Can a foreigner obtain a license in Europe?

Yes, foreigners can obtain a VASP license in Europe either by registering a company in the European country where they seek the license or through a local branch of their foreign company.

Can a foreigner be a shareholder/director?

Yes, foreigners can be shareholders or directors, but they must comply with the specific country’s regulations regarding foreign ownership and management.

For example, in Poland, if there is only 1 foreigner shareholder you will must to comply with insurance tax, however if there will be 2 foreigner shareholders, there will be no extra insurance tax for the business

How long does it take to obtain crypto license?

The time varies by country but typically ranges from a few weeks to months, depending on the regulatory complexity and documentation.

As an example, the fastest solution will be in Czech Republic, where crypto license can be obtained within 1 month, and even faster if proceeding with ready-made vasp licensed company, which takes 1-2 weeks.

Is it possible to open bank account for crypto services?

Yes, it’s possible, but it depends on the bank’s policies on crypto services and the regulatory environment of the country where the account is being opened. Mainly we help our clients to open crypto-friendly corporate accounts in European EMI’s.

How much crypto license cost?

Costs vary widely depending on the jurisdiction, including government fees, legal fees, and other related expenses. It’s best to consult with a specialist for a detailed quote. Cheapest option for obtaining crypto license starts from 1000 euro.

Crypto market business models

Each business model in the cryptocurrency market comes with its own set of risks, regulations, and technological needs, requiring different strategies for success and compliance. As the industry evolves, these models may adapt or new models may emerge to meet the changing landscape of blockchain technology and user demand.

Comparison table with VASP licensing options

Czech RepublicPolandLithuaniaEstoniaCanadaCyprusSlovakia
Share capital Requirement1 CZK

5,000 PLN (~1,100 EUR)125,000 EUR250,000 EUR025,000 EUR5,000 EUR
Corporate Tax21%19%5-15%0%12%12.5%21%
Local Staff membersNo requirement

Recommended to have AML Officer
No requirement

Recommended to have AML Officer
AML Officer and Local Senior Manager (director)Local Director
Local MLRO
Local Internal Auditor
Local External Auditor
Local Compliance/AML officerLocal Director
Local AML Officer
Local Director/AML officer
Physical OfficeNoneNoneRequiredRequiredRequiredRequiredNone
Local Bank account
Project time frames 4 weeks4-6 weeks8 weeks6 months2-3 months4-6 months6-8 weeks

Roadmap for registration your Crypto license

1

Decide on Your Crypto License’s Jurisdiction

Choose suitable jurisdiction for your business model, important criteria based on compliance level, regulations, taxes, market size, geography of the clients, location of partners, timeframes and budget. There is prestigious, world recognized options as well as fast and cheap license options

2

Document Gathering

In this step, we build a tailored plan for your project. We check the backgrounds of shareholders and team members to make sure they’re a good fit for the license requirements. We also gather documents from you to get ready for the application, focusing on what makes your project stand out

3

Company Registration

The application needs to be filed by a business that’s officially registered in the country where the application is being made, or by a local branch of an overseas company, following the country’s business registration laws

4

VASP License applications process

Preparation of application form, business plan and financial forecast (if required by local regulator), appointing and registering local employees (if required), depositing and registering share capital (if required), due-diligence measures, verification, risk appetite, description of business and services, notification to regulator of all requirements concluded

5

Submission of application

When all the documents and application is submitted, we await additional questions from regulator if appears, and follow-up for successful license granted

6

Bank Account

Most important step for crypto business is to open crypto-friendly corporate bank account. Luckily Legalaes have multiply EMI’s partners across Europe, with direct manager communication to fasten-up the process.

7

Ongoing support

If required our company will help your business with connecting with local accountancy, contract preparation, VAT number obtainment etc.

Legalaes team always stays up to date with local authorities about any changes in regulatory frameworks or change of requirements. This significantly increases our professional approach and expertise, allowing to avoid any delays and manage the project few steps ahead.

Eriks Fijalovs

Head of Blockchain and Crypto

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