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Does crypto business require a license?

Discussion in 'Offshore Company formation' started by bountymounty, May 9, 2018.

  1. bountymounty

    bountymounty Trusted Member Mentor Group Business Angel

    I was wondering if trading crypto of behalf of 3rd party requires a license?

    Does someone know, if so, what licese does it require?
     
    diablo, maxmoney and blueweb like this.
  2. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Depends on country. In principle handling any 3rd party funds/assets falls under some sort of regulation in most countries.
     
    bountymounty likes this.
  3. void

    void Trusted Member Business Angel

    e.g. crypto only exchange needs nothing - problem is a connection with fiat money
     
    bountymounty likes this.
  4. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Issue has nothing at all to do with connection to fiat. The issue is handling of 3rd party assets. Most exchanges are regulated or in a limbo state where they are allowed to operate until regulation catches up.

    It would be bad idea to setup an unregulated exchange in 2018. The decades in prison you can serve you if it is misused for criminal activity should be enough to shutdown that idea entirely.
     
  5. void

    void Trusted Member Business Angel

    So you're basically saying that my "private" exchange allowing to trade say BTC, LTC, ETH in EU country should have licence? Who will be the regulator? National bank? :)
    Allowing people to exchange "worthless" number for another "worthless" number - who cares? :-D
    Mentioning criminal activities... you can pay a hit man by you home grown potatoes... does it need any regulation?
    I'm definitely not sure about that but makes sense to me.
     
  6. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Yes, The FSA is regulator in most countries. In some countries the regulation does not exist but operators are advised to follow AML policy of that country and that maybe enough to keep you out of jail.
     
  7. bountymounty

    bountymounty Trusted Member Mentor Group Business Angel

    Yes got offered a license in Belize, they ask for 50K $US is that the price for such license you think?
     
  8. extremedox101

    extremedox101 Trusted Member Business Angel

    so this require license or no?
     
  9. blueweb

    blueweb Corporate Services Mentor Group Business Angel

    If you trade with 3rd party funds it requires a financial license. If it's personal trading no license is required.
     
  10. bountymounty

    bountymounty Trusted Member Mentor Group Business Angel

    where do you think is best to setup my crypto business? I want to trade on behalf of 3rd party!
     
  11. moneromadman

    moneromadman New Member

    Never mind regulation that wpuld be an offence regardless ;)
     
  12. void

    void Trusted Member Business Angel

    I'm not the right person to ask... however I strongly believe that you can sell/buy crypto currency for another crypto currency anywhere (if not in the world then at least Europe). You don't need license, permit, pay taxes - all that until you get involved with real world. No matter what when you sell crypto for fiat money or benefit from it (buying house, weed, computer, ..., whatever) you have to pay taxes from your profit.
    JUST MY OPINION - CAN BE WRONG
     
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  13. maxmoney

    maxmoney Trusted Member Mentor Group Business Angel

    I believe as you don't trade with 3rd party money you won't need a license. Otherwise a simple financial service license may be what is required.
     
  14. bountymounty

    bountymounty Trusted Member Mentor Group Business Angel

    thanks for the answers guys! I wonder what you think will happen if I don't obtain a license for my operation but just take 3rd party funds in to reinvest. The investor group is only 30 people so the inward payments are always from the same people.
     
  15. diablo

    diablo Banned Users Business Angel BANNED MEMBER

    I agree with you but then again, on the other hand, if you only exchange crypto not crypto to fiat why would that require a license in most countries? as @void say, who is going to regulate that?
     
  16. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Handling any thirdparty assets is a regulated activity in most countries - fiat or not fiat. You must have KYC on your client regardless of whether you use fiat or not and also follow AML best practices.

    AML and KYC does not just apply to fiat money. The best way is for people to find out the hard way and become a trending news story on coindesk after being tracked down and arrested.
     
    diablo likes this.
  17. lostguy

    lostguy Active Member Entrepreneur

    don't you think it is only the China man that is getting arrested and people in South Korea? I wonder if we han dig up a story about any European that has been arrested for exchanging crypto currency only. I don't speak crypto to fiat but only crypto i.e. btc to ether or similar?
     
    diablo likes this.
  18. Martin Everson

    Martin Everson Offshore Consultant Business Angel

    Google is your friend.
     
  19. bountymounty

    bountymounty Trusted Member Mentor Group Business Angel

    Thank you for the answer. I know Costa Rica is large in regards to financial service activities. However, the fact they don't require you to obtain a license also make it impossible to get a bank account for the company.
     
  20. negon

    negon Offshore Agent Mentor Group Business Angel

    You want to open a bank account for a CR company in Hong Kong ?