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What Steps Must a Firm take before Obtaining a Cryptocurrency License?

By Jackie Crowley, California Business Journal

Basics of your getting a crypto license

Many investors who plan to develop their businesses prefer to do this by creating a cryptocurrency company. Because the cryptocurrency industry is gaining momentum, it is a necessary tool for increasing capital. But for a legal business with virtual assets, you need to obtain a cryptocurrency license. Consider the main stages that a firm must go through for licensing in the field of crypto activities. Of course, each jurisdiction has its requirements. Still, we will consider the main conditions imposed by the states where crypto activities are legalized and controlled by the relevant authorities – the Regulators.

Stage 1 – Register a Firm

For legal activities, you should obtain a Certificate of Registration to enter the firm in the Register of Companies of the chosen jurisdiction for crypto business.

To do this, you need to prepare the required package of papers to submit for registration:

from the management team of the organization (founders, directors, shareholders), it is necessary to submit notarized copies of passports, utility bills, resumes, letters of recommendation, and certificates of no criminal record;
charter and detailed business plan of the organization indicating its structure, planned activities, and expected results;
document the source of capital;
draw up an application for firm registration by this form;
obtain a legal address: provide an office lease agreement (or purchase and sale agreement) – some jurisdictions require an actual office in the state;
a document confirming the payment of the state fee for registration.

Also, at this stage, it is necessary to determine the company’s unique name, which is not in the Register of Organizations of the selected jurisdiction. Please note that many countries have specific conditions to consider when choosing a firm name. If the provided package of documents meets all the requirements, you will receive a Certificate.

Please note that in some states, firm registration can be done remotely – there is no requirement for the physical presence of a representative of your firm. In addition, each jurisdiction has its requirements for the citizenship of the leadership, and it is advisable to know about this in advance.

Stage 2 – Opening a Corporate Account

Every organization needs to open a local bank account. It is recommended to consider several options, analyzing the degree of risks associated with implementing an AML policy.

After the choice of a bank is made, it is necessary to prepare the package of documents required by the bank: the movement of funds, a certificate of the source of capital, describe the purpose of opening an account, submit a list of leading partners, provide paid utility bills, and so on.

Also, at this stage, an accounting department should be organized to manage financial transactions and provide reports to the relevant authorities.

Stage 3 – Licensing Process

Each state has its own Regulatory Authority responsible for permitting and issuance.

Please note that some countries issue one permit for several types of financial activities related to virtual currency, and some countries issue a request for one specific action.

Once you decide on the license type (if necessary), you can apply for licensing.

General Requirements

The first is that the Regulator will require a package of documents: constituent documents, passports of managers, a certificate of the source of income, utility bills, and much more. A management team must be formed with a professional fit for the business: financial or economic education and experience in crypto. In addition, all firm personnel must be trained and competent.

Most states impose requirements on the size of the authorized capital. Still, if there are no requirements, then the financial start of your company should ensure the entire operation of the company for several months. An essential requirement is implementing and adhering to the policy of AML and KYC. To do this, you need to appoint a responsible AML officer.

Appropriate technical equipment is also essential: equipment and software are necessary for the full-fledged work of the organization. Moreover, the software must comply with specific legal regulations to protect customers’ confidential information and prevent illegal financial transactions.

Before getting a work permit, contact a crypto SEO agency to help create a platform that will appeal to search engines and allow your business to grow. Here are the general rules for obtaining a license for crypto activities. In each country, the licensing terms are different and can be from 1-2 weeks to six months.