Cryptocurrency broker license
What is a cryptocurrency broker license?
A cryptocurrency broker is an intermediary that helps to make transactions with virtual currency and charges a commission for its services. Trading on the stock exchange requires a lot of knowledge and skills that the beginner does not have. The brokerage company is ready to accompany the trader at all stages of trading – to assist in opening accounts, making sales or purchase orders, finding suitable counterparties.
The importance of cryptocurrency broker license
The assets of traders and investors held on licensed trading platforms are more protected as the exchange operates in accordance with the laws and requirements. Unlicensed sites provide access to new users by limiting basic knowledge to those who use the market to launder money and finance criminal activities. These violations are considered to be one of the main problems of the industry, so the government authorities are introducing a number of strict measures to eliminate this possibility.
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How to choose and get a cryptocurrency broker license
The broker needs to determine the geography of the company before it can be started. That doesn’t mean that the physical address of the office and the location of the operations should be the same. However, depending on the place of registration, it will have different conditions for obtaining registration. To understand which institution to apply for a cryptocurrency broker license, the broker needs to answer several questions such as what budget it is prepared to allocate for the license, who is the partner bank (where accounts will be opened), place of business of the company, how much time he’s willing to spend on the licensing process.
The process of obtaining a cryptocurrency broker license :
- choose a jurisdiction and open a company there
- contact the bank to open a corporate account
- review the list of required documents to prepare the required papers
- after submitting the documents, the regulator examines whether the company meets the legislation
- pay your taxes and dues
- get a license for your crypto exchange, allowing the platform to offer cryptocurrency services legally.
If a brokerage company decides to apply for a license not independently, but with the help of a specialized company, its heads should be prepared for additional expenses such as accounting activities, office rental, wages, additional bank accounts, creation of Terms of Use, Privacy Policy, Cookie Policy.
