Crypto license in Europe

Crypto license in EU | VASP & CASP in Europe

Regulation of crypto-assets, tokens and blockchain in European Union

Our team has been specialising in supporting crypto projects and blockchain startups in the European Union since 2017. During this time, we have established the necessary legal framework, set up the internal financial and IT infrastructure, developed and implemented efficient AML/KYC algorithms, obtained crypto cences or authorizations, and helped to successfully launch blockchain projects in the EU legal framework for more than 300 of our clients.

Why Us?

We always keep a close eye on the latest news in the crypto industry and developments in blockchain technology, as well as carefully monitor changes in legal enactments and international AML/CFT standards. Our consultants, lawyers and financiers are competent in solving the most complex and unusual problems and are always ready for new challenges.

OBTAINING A CRYPTO LICENSE IN EUROPE

Applying for a license for crypto related acitivity in European Union

If you want to set up a blockchain project and start providing cryptocurrency exchange services to your clients in Europe (primarily in the European Union), you should definitely think about the regulation of cryptocurrencies and virtual assets and the need for your project to obtain a crypto license for carrying out VASP or CASP activities in a specific European jurisdiction.

Legal status of crypto industry in the European Union

At the moment, not all European states have developed and implemented principles for the regulation and control over the activities of crypto exchangers and crypto exchanges, and in many EU countries the cryptocurrency industry is still in a grey area. To date, the regulation of VASP or CASP activities for the exchange and storage of cryptocurrencies and the possibility of obtaining the appropriate registration or license at the legislative level has been implemented in the following European countries: Bulgaria, Germany, Ireland, Lithuania, Poland, Portugal, Slovakia, Czechia, Estonia.

What we offer?

Our company offers the opportunity to register your crypto business and start a cryptocurrency exchange activities in different European states. We will consult you individually, analyse the expected business flows and the specifics of your blockchain project and offer you the best and most rational solution to obtain a crypto license or VASP or CASP registration and successfully start your cryptocurrency business in the EU.

BEST EUROPE COUNTRIES FOR CRYPTO BUSINESS

Where is the best place to get a crypto license and start a crypto business in the EU?

To date, the following countries are worth paying special attention as the most effective and popular jurisdictions for registering a crypto company and starting commercial activities related to the exchange and storage of cryptocurrencies:

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  Crypto license in Lithuania

  As of now, Lithuania appears to be the most appealing jurisdiction for launching a cryptocurrency exchange or other type of blockchain startup. Get a crypto license for the opportunity to work with cryptocurrency in Lithuania and run your blockchain project in 3-5 weeks time.

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• 

  Crypto license in Estonia

  We present an opportunity for cryptocurrency license obtainment in Estonia, a country which became a first jurisdiction in the EU that legalised services of cryptocurrency exchange and crypto wallet back in 2017. Professional legal supervision and AML/CFT consulting.

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• 

  Crypto license in Czech Republic

  Obtain a crypto license in Czech Republic and set up your blockchain startup or crypto exchange in the heart of Europe in 3 to 4 weeks. Simple and understandable legislative regulation of work with virtual assets, incl. crypto, tokens, NFT and others. Full legal & AML/CFT support.

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If you are interested in the above possibilities for obtaining a European crypto license for VASP or CASP activities, please contact our consultants by phone, e-mail or fill in the form below. We will contact you to discuss all your concerns, discuss the requirements for a license applicant, provide you with a step-by-step description of the licensing process and prepare a personalised quotation for you.

 

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WHAT IS CRYPTOCURRENCY?

Definition of cryptocurrency, virtual assets and tokens

Following a sharp increase in interest in cryptocurrency assets triggered by the ICO boom and the strengthening of the role of cryptocurrencies in the modern financial system, the independent inter-governmental organisation – FATF (Financial Action Task Force on Money Laundering) made significant additions to its AML/CFT guidelines and recommendations in October 2018, making the AML/CFT component an integral part of financial activities involving virtual assets and cryptocurrencies.

European legislative acts on Crypto Assets

In the same year, the European Parliament approved the 5th AML Directive (2018/843), which supplemented the existing EU financial and AML/CFT regulations with the concept of virtual currency.

• Legal acts:
  • Directive (EU) 2015/849 of the European Parliament (4th Anti-Money Laundering Directive, 4AMLD)
  • Directive (EU) 2018/843 of the European Parliament (5th Anti-Money Laundering Directive, 5AMLD)
  • Proposal for a regulation of the European Parliament 2020/593 (Markets in crypto-assets, MiCA)
  • AML/CFT acts, National Risk Assessments (NRAs) and other EU member state regulations
  • FATF regulations, guidelines and standards

• Virtual asset is interpreted as a digital representation of values or assets that may be traded or may circulate in digital form, and be used for payment or investment purposes, but is not a digital representation of fiat currencies, securities or other classic financial assets.
• VASP is a Virtual Asset Service Provider in accordance with the terminology of the 5th Anti-Money Laundering Directive.
• CASP is a Crypto-Asset Service Provider in accordance with the terminology of the Markets in crypto-assets (MiCA) Regulation.

Based on the above, virtual assets may include digital asset classes such as cryptocurrencies and tokens, including security tokens, asset-backed tokens, certain utility tokens, unique NFT tokens (non-fungible tokens), and this list can be continued.

CRYPTO RELATED SERVICES

What services can a crypto company provide?

According to the FATF classification and the definitions set out in the 5th AML Directive, a virtual asset service provider (VASP) is any natural or legal person who conducts business, provides services or carries out transactions for the benefit of another natural or legal person in the following areas:

Crypto vs fiat exchange service

Exchange between virtual assets (cryptocurrencies, tokens, etc.) and fiat currencies (classic money)

Crypto vs crypto exchange service

Exchange of one or more forms of virtual assets for other virtual assets

Execution of crypto transfers

The transfer of virtual assets is defined as a transaction on behalf of another natural or legal person in which a virtual asset is moved from one virtual asset address or account to another.

Custodian virtual currency wallet service

Provision of services for the storage and/or administration of cryptocurrencies and other virtual assets by means of an appropriate IT solution or other technological mechanism, while retaining the full right of control and disposal of virtual assets for clients.

Initial Coin Offering (ICO)

Provision of financial services related to the initial offering and/or placement of virtual assets (cryptocurrencies, tokens, etc.) on behalf of the client (issuer).

Based on the above, with a VASP or CASP license, it is possible to create both a narrowly focused crypto exchanger or service that provides the ability to use a custodial crypto wallet, as well as a full-fledged cryptocurrency exchange with broad functionality.

CRYPTO REGULATION IN EUROPE

Regulation of crypto companies, crypto exchanges, VASP and CASP in the EU

The FATF recommendations established requirements according to which virtual asset service providers (VASPs) should be subject to regulation in order to counter money laundering and terrorist financing (AML/CFT), as well as licensing or registration, and their activities should be subject to effective systems of state control and supervision.

The 5th Anti‑Money Laundering Directive

The 5th AML Directive (2018/843) outlined an obligation for all EU member states to regulate virtual assets and cryptocurrencies at the level of local legislation and ensure registration or licensing for VASPs, crypto exchangers and other participants in the cryptocurrency industry. Thus, EU member states have started to allow blockchain businesses to formally register their activities and obtain licences for the exchange or storage of cryptocurrencies (cryptocurrency licences and VASP licences), step by step.

Local regulations of EU member states

As of 2022, not all EU member states have complied with the directive and provided for the possibility of obtaining a license to work with cryptocurrencies. Among the European jurisdictions already regulating VASPs, there are no uniform standards for the regulation and supervision of cryptocurrency business: for example, cryptocurrency exchangers in Germany are regulated by the financial regulator BaFin, and there are very serious requirements for such companies, while in the Czech Republic, the registration of crypto activities is handled by the Trade Licensing Register and, in fact, there are virtually no specific requirements for VASPs.

MiCa Regulation

On April 20, 2023, the European Parliament approved the Markets in Crypto-assets (MiCA) regulation project, ending a multi-year process of negotiating this legal act. The main objective of MiCA is to implement a set of effective measures into the EU’s unified legislation, aimed at supporting the potential and innovative development of the digital finance industry. The implementation of the MiCA regulation is intended to ensure fair competition between cryptocurrency companies while minimizing financial and AML/CFT risks. From January 2025, MiCA provisions relating to the regulation of cryptocurrency companies’ activities will become mandatory for all market participants.

REQUIREMENTS FOR VASP & CASP

Basic Requirements for Crypto Service Providers Europe

The 5th AML Directive (2018/843) established the basic requirements for virtual asset service providers (VASPs), outlined the conditions for the provision of services and obligations of crypto exchangers, crypto exchanges and other cryptocurrency projects to comply with AML/KYC measures.

What Criteria should a Crypto Licensed Company meet?

The requirements that are imposed on crypto companies may differ to some extent depending on the specific jurisdiction, but most often cryptocurrency service providers must meet the following criteria:

Related persons

General managers, founders and beneficiaries of a cryptocurrency company must have an impeccable business record and have no punishment under criminal law, as evidenced by a certificate of no criminal record. In some jurisdictions, there is a requirement that the general manager must be local.

MLRO and AML officer

A cryptocurrency company must engage a competent AML officer (Compliance Officer) or MLRO (Money Loundering Reporting Officer), to communicate with the regulator and report suspicious transactions.

Internal AML/CFT policy and risk management

Crypto-companies are required to develop and implement effective AML/CFT measures in their internal processes, which, among other things, must include and regulate the following circumstances:

• client identity verification procedures
• application of precautionary measures, the principles of Know Your Customer (KYC) and Due Diligence
• procedures for screening and monitoring clients’ transactions
• procedure for applying international financial sanctions and restrictive measures
• AML/CFT risk assessment and policies to manage and mitigate identified risks
• procedures for submitting notifications and information to the supervisory authorities
• procedure for conducting internal control for compliance of the company’s activities with AML/CFT standards

Obligation to notify supervisory authorities of suspicious transactions

Crypto companies are obliged to inform the supervisory authorities about suspicious transactions and unusual transactions and strongly contribute to the identification of circumstances indicating criminal activity or attempts at money laundering and terrorist financing, as well as circumvention of international sanctions.

Obligation to keep information

All VASP or CASP, cryptocurrency exchanges and crypto exchangers are required to keep data about their clients and information about transactions made by them for a specified period of time, which is set by the AML Act of the particular jurisdiction (usually at least 5 years).

At the level of a particular European jurisdiction, local legislation for VASP or CASP may also impose additional minimum share capital requirements, specify the need for a local office or stipulate that a general manager and/or MLRO of the company must be a resident of its state of incorporation.

PAYMENT SOLUTIONS FOR CRYPTO BUSINESS

Assistance in payment accounts opening for crypto related acitivty

The successful operation of a VASP or CASP, cryptocurrency exchange or crypto exchanger requires an activity account for paying running costs, an operational current account for making transactions with clients, and a corporate account on some large and trustworthy cryptocurrency exchange in order to ensure the liquidity of your project.

Need help setting up a payment infrastructure?

Since the cryptocurrency industry is a high-risk field of activity in the context of AML/KYC, not every bank or payment system is ready to provide services for receiving and sending payments to representatives of this field of activity. Our consultants and specialists are always ready to offer you their assistance in setting up an efficient payment infrastructure for your crypto start-up – we will assist you in opening current accounts with banks, and EMI/PSP payment institutions, as well as set up corporate profiles for you on the most common crypto exchanges.

AML/CFT CONSULTING

Anti-Money Laundering & Sanctions Consulting for Crypto Industry

The obligation to comply with AML/CFT measures is a fundamental factor to every European cryptocurrency company and VASP or CASP. In addition to the development and implementation of effective internal AML/CFT rules and algorithms in the company’s activities (the theoretical component), the tools and channels through which a company will fulfil its obligations to identify and verify customers and their transactions in real life (the practical component) are also crucial.

Risk Approach in Crypto Business

If your crypto start-up plans to offer its services to a wide range of clients and successfully compete in the EU cryptocurrency services market, then it is vital to implement modern IT systems into the company’s work to automate and increase the efficiency of client identity verification processes, checking customers for presence on sanctions lists and lists of politically exposed persons (PEP), implementation of screening and monitoring procedures, as well as verification of cryptocurrency transactions and crypto wallets of your company’s clients (SumSub, Crystal, Chainalysis and others).

Effective and Risk-Based Due Diligence Measures

Our consultants and lawyers are ready to provide you with qualified assistance in developing AML/CFT documentation and internal regulations for your crypto company, as well as implementing the most innovative IT solutions that will fully meet all legal requirements and reflect the specific business model of your crypto project.

CONTACT US

Get an initial advise and a price quote for your European crypto-startup today

The long-term experience and competence of our specialists will allow you to introduce your blockchain start-up or cryptocurrency exchange into the legal framework of the European Union as soon as possible.

For individual advice or offer on obtaining a crypto license in Europe, please contact our experts by phone, e-mail or leave an application on our website.