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Cryptocurrency - a wallet or exchange?

Contributed by Larssen
13 September, 2018


Cryptocurrency business licensing is an optimal step to minimize risks.

Steady cryptocurrency growth is a reliable proof that investors tend to use it more and more often in their day-to-day settlements, no matter various difficulties related to that. The key here is to consider the issue thoroughly and scrupulously, so to reduce personal risks as much as possible. Cryptocurrency business licensing may partially address the problem. 

Legal basis and licensing procedure

Cryptocurrency business licensing is based on the effective Money Laundering and Terrorist Financing Prevention Act and is considered by Estonian Police and Border Guard Board. First of all, the license is necessary to digital currency transaction service providers: exchange, turnover, transfer, and keeping.

The licensing is a several steps process:

  • The development of rules of conduct and regulations allowing to provide services in strict compliance with the law, the description of the technical risks of the technology used.
  • Submitting the set of documents to a licensing authority: an application, the above-mentioned rules of conduct, and supporting documents for approval.
  • Waiting for the results up to 30 calendar days. The process will end either with the issued license or grounded refusal to accept the application.

A license is an attempt to make transactions legal which, in its turn gives additional guarantees and reduces the risks of deposit loss. That is why firms planning to raise income from digital money are recommended to consult a lawyer about that issue.

Advantages

  • The ability to use a cryptocurrency wallet legally, exchange fiat and back, do other proper transactions legally.
  • The basis for productive communication with banks and other financial institutions.
  • Perfect basis for preparing ICO (Initial coin offering) whenever necessary.
  • Licensing helps to avoid in-depth and/or negative attention of authorities.
  • Entitles to provide a wallet and exchange services. If necessary, you may legally exchange your revenues or the part of your deposits into fiat.



 


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