Exploring the Types of Crypto License in Asian Countries: Which One to Obtain and Why

As we saw in another article, Africa is leveraging blockchain to solve financial inclusion hurdles. Meanwhile, the Asian continent has positioned itself as the engine of the global crypto economy.

The regulatory environment and legal frameworks across Asian crypto scene are highly diverse, presenting both opportunities and challenges for businesses.

This diversity, combined with regulatory fragmentation among jurisdictions, makes it essential for companies to understand the specific requirements in each country.

This diversity significantly impacts the types of crypto licenses found in the world’s most dynamic market, as different legal frameworks and regulatory environments shape the licensing options available to crypto businesses.

Asia crypto license and the hub of global finance

Asia is frequently cited as the leader in grassroots crypto adoption, with countries like Vietnam and the Philippines topping global charts.

The region has seen a significant rise in cryptocurrency startups and cryptocurrency businesses, drawn by Asia’s strong international reputation for financial innovation and regulatory clarity.

However, unlike other regions where crypto serves primarily as a substitute for lacking banking infrastructure, in Asia, it often operates in tandem with highly developed financial systems.

The demand here is twofold:

1. Institutional Adoption: Wealth management firms, family offices, and FinTechs in hubs like Singapore and Hong Kong require robust, regulated frameworks to offer digital assets to professional investors.
2. Retail Innovation: A massive population of tech-savvy users drives the need for efficient trading platforms, payment gateways, and GameFi projects.

This dual demand has led Asian regulators to develop some of the most comprehensive and clear regulatory frameworks in the world.

Companies seeking to enter the Asian market must carefully consider the type of crypto business structure that best fits their goals and compliance needs.

For a crypto service provider, an Asian license is often a badge of prestige and reliability.

On another topic: Best Countries to Set Up a Crypto Spot Trading Company

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The prime example of the Asian Fintech Ecosystem

LegalBison’s team has assisted numerous projects navigating the complexity of FinTech landscape.

A recurring success story in the region involves payment processors and exchanges leveraging the Singaporean or Hong Kong frameworks.

Obtaining a Hong Kong crypto license is considered prestigious due to its strict requirements, including the need to establish a local presence and comply with robust regulatory standards.

The process of securing a crypto license in Hong Kong involves meeting specific legal, operational, and compliance criteria, which enhances a company’s credibility and market access.

By securing a license in these Tier-1 jurisdictions, companies do not just gain the right to operate; they gain access to the global banking network and the trust of institutional partners, a crucial asset for any Web3 project aiming for longevity and high-volume transactions.

For cryptocurrency exchanges operating in Hong Kong, having a local bank account is essential for regulatory compliance and smooth transaction processing.

In Hong Kong, cryptocurrencies are classified as virtual commodities, which impacts the licensing process and regulatory obligations for businesses seeking a license in Hong Kong.

Onshore vs Offshore crypto licenses in Asia

Asia is vast, and its jurisdictions range from elite global financial centers to business-friendly special economic zones.

‘Business friendly jurisdictions in Asia, such as Singapore, attract foreign investors seeking an Asia license due to their clear regulatory frameworks and supportive environments for blockchain and cryptocurrency startups.

As a consequence, the main difference we point out when thinking about crypto licenses in Asia is similar to other regions:

Is the goal to establish a prestigious headquarters in a major financial hub (Onshore), or to set up an efficient, tax-optimized operational base (Offshore)?

Obtaining certain types of Asia licenses, especially in onshore jurisdictions, often requires significant investment in terms of time, resources, and compliance planning.

This is the key distinction when it comes to differentiating various types of crypto licenses in Asia: High-Tier Onshore licenses and Regional Offshore/Mid-shore licenses.

The attractiveness of “Mid-shore” crypto licenses in Asia: The Labuan option

In the context of Asia, the concept of “offshore” is best represented by Labuan, a federal territory of Malaysia.

Unlike traditional Caribbean offshore centers, Labuan is unique as it offers a balance one could call “mid-shore.”

Labuan is notable for several aspects:

• Asian Presence: It provides a legitimate Asian address and license, respected within the region. Having a legal address is essential for obtaining a Labuan cryptocurrency license and fulfilling regulatory requirements.
• Tax Efficiency: It offers a highly competitive tax regime (often 3% on audited net profits) while remaining compliant with international standards.
• Operational Ease: The setup cost and requirements are significantly lower than in Singapore or Hong Kong, making it ideal for startups and mid-sized exchanges.

Our experience demonstrates that Labuan is often the perfect entry point for companies that want an Asian footprint without the capital intensity of a full onshore license.

Labuan is also an attractive option for a crypto licensed company in Malaysia seeking legitimacy and regulatory compliance through a recognized cryptocurrency license in Asia.

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Securing a “Tier-1” Onshore license: Singapore and Hong Kong

Onshore licenses in Asia play a different role.

They are designed for established players and those seeking maximum credibility.

Meeting the licensing requirements involves a detailed licensing procedure, including submitting applications to the relevant regulatory authority, providing documentation, and obtaining regulatory approval to operate legally.

Singapore, regulated by the Monetary Authority of Singapore (MAS), and Hong Kong, with its new VATP (Virtual Asset Trading Platform) regime, represent the gold standard.

Obtaining a crypto exchange license in these jurisdictions is crucial for legal operation and attracting institutional investors, as it demonstrates market credibility and robust compliance.

Monitoring transactions is a key compliance measure, ensuring adherence to AML guidelines and regulatory standards.

• Singapore (MAS): Focuses heavily on payment services (DPT – Digital Payment Token services) and operates under the Securities and Futures Act (SFA). It is the jurisdiction of choice for projects that want to integrate deeply with the traditional financial world, benefiting from a transparent regulatory framework and evolving regulations influenced by the Financial Action Task Force (FATF).
• Hong Kong (SFC): Has recently opened its doors to retail trading under strict supervision, positioning itself as the premier hub for crypto exchanges in East Asia. The SFC classifies crypto assets and virtual assets under its regulatory framework, requiring financial stability and compliance with licensing requirements to enhance trust among institutional investors.

Obtaining these licenses requires substantial paid-up capital, local physical offices, and strict AML/KYC compliance personnel.

In return, they offer unparalleled access to Asian capital markets. Onshore licenses are essential for digital currency projects and crypto services, as regulatory bodies such as the MAS, SFC, and the Securities and Commodities Authority oversee compliance to maintain financial stability and market credibility.

Consumer protection and compliance standards in Asian crypto licensing

Consumer protection stands at the forefront of the crypto licensing process across Asia, reflecting the region’s commitment to building a secure and transparent cryptocurrency market.

Regulatory bodies such as the Monetary Authority of Singapore (MAS) and the Securities and Futures Commission (SFC) of Hong Kong have established comprehensive frameworks that set high standards for crypto companies, ensuring that investor interests are safeguarded at every stage of operation.

Under the Payment Services Act in Singapore, payment service providers; including those offering digital asset and cryptocurrency exchange services must implement stringent security protocols to protect user funds and data.

Similarly, Hong Kong’s regulatory framework for virtual asset service providers (VASPs) requires licensed exchanges to adhere to robust anti-money laundering (AML) and know-your-customer (KYC) procedures, as well as to maintain transparent financial statements and effective risk management systems.

The licensing process in these key jurisdictions involves a thorough evaluation of a company’s business plan, ownership structure, and compliance policies.

Regulatory authorities conduct detailed reviews, on-site inspections, and interviews with key personnel to ensure that crypto businesses are fully prepared to meet ongoing compliance requirements.

This rigorous approach not only deters money laundering and other illicit activities but also fosters investor protection and market integrity.

Beyond regulatory compliance, Asian crypto licenses require companies to prioritize consumer education and transparent communication.

Licensed exchanges and service providers are expected to clearly disclose the risks and benefits associated with digital assets, offer accessible educational resources, and maintain efficient complaint handling mechanisms.

These measures help consumers make informed decisions and build trust in the rapidly evolving cryptocurrency industry.

What type of Asian crypto license will suit your project?

A crypto company willing to expand its market into Asia should choose the type of crypto license to operate with depending on its stage of growth and target audience.

The process of obtaining a crypto license is crucial, as it enables compliant cryptocurrency operations and provides access to global markets:

• A Labuan (Mid-shore) license will allow for a cost-effective setup with low taxes, suitable for startups and projects serving a global or regional retail market.
• A Singapore or Hong Kong (Onshore) license will build a foundation for institutional trust, bringing the project into the heart of global finance and facilitating high-level banking partnerships.
• A Georgia (Mainland) license will represent an ideal compromise between the two solutions above, with a high level of trustworthiness and an affordable framework.
• An India (Onshore) license is essential for accessing one of the world’s largest and fastest-growing crypto markets. Operating under the regulatory oversight of the Financial Intelligence Unit (FIU-IND), it provides a critical gateway to serve the vast Indian user base, though it requires strict adherence to local AML/CFT and KYC regulations.

As of now, LegalBison has considerable experience guiding its clients toward securing both efficient Labuan structures and prestigious Singaporean authorizations.

If your project requires a foothold in the Asian market, we invite you to start a conversation with our team.

We will be happy to assist you in obtaining a crypto license to facilitate your cryptocurrency operations and entry into global markets, ensuring your business runs legally and safely by securing the proper authorizations and licenses in the right Asian jurisdictions.

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FAQ

How to get a crypto license?

Obtaining a crypto license in Asia generally follows a rigorous two-tier process: Corporate Setup and Regulatory Approval.

Entity Incorporation: You must first register a local legal entity (e.g., a Sdn Bhd in Malaysia or a Pte Ltd in Singapore). Most jurisdictions require a physical office and at least one resident director.

Minimum Capital: You must meet “paid-up capital” requirements. For a Digital Asset Exchange (DAX) in Malaysia, this is typically MYR 5 million.

Compliance Framework: You must appoint a dedicated Compliance Officer and submit comprehensive manuals for AML (Anti-Money Laundering) and KYC (Know Your Customer).

The “Fit and Proper” Test: Regulators (like the Securities Commission) will vet all directors and senior management to ensure they have the necessary expertise and a clean professional record.

Technical Audit: You must provide documentation on your cybersecurity protocols and custody solutions for user funds.

Is cryptocurrency regulated in Malaysia?

Yes. Cryptocurrency is fully regulated in Malaysia, primarily as a security.

The Authorities: The Securities Commission Malaysia (SC) is the primary regulator for digital asset exchanges (DAX), initial exchange offerings (IEO), and digital asset custodians (DAC). Bank Negara Malaysia (BNM) oversees the AML/CFT reporting obligations.

Legal Status: While digital assets are legal to trade, hold, and issue (with a license), they are not recognized as legal tender or a payment instrument by the central bank.

New for 2026: Licensed exchanges now have more autonomy to independently approve token listings, making the market more dynamic and increasing the variety of assets available to local investors.

Is crypto tax-free in Malaysia?

This depends entirely on your intent and the frequency of your transactions. Malaysia uses the “Badges of Trade” test to decide.

Tax-Free (Capital Gains): If you are a casual investor who buys and holds crypto for the long term, your gains are generally considered capital gains and are not taxable (as Malaysia has no general Capital Gains Tax).

Taxable (Revenue Gains): If you trade frequently (day trading), mine professionally, or accept crypto as a business payment, this is classified as business income. It is subject to standard Income Tax rates.

Service Tax: Since 2025/2026, the Ministry of Finance has clarified that platform service fees (trading fees) from both local and foreign exchanges are subject to Service Tax (SST).

Is Malaysia a crypto-friendly country?

Yes, Malaysia is considered one of the most crypto-friendly nations in Asia for several reasons:

Clarity: Unlike many regions with “grey” areas, Malaysia has a very clear, published legal framework. Investors know exactly what is legal and what isn’t.

Tax Advantage: The lack of tax on long-term capital gains makes it a “haven” for individual retail investors compared to neighboring countries like Indonesia or Thailand.

Innovation-Forward: The government’s 2022–2026 Financial Sector Blueprint actively encourages the exploration of CBDCs (Central Bank Digital Currencies) and blockchain-based financial infrastructure.

Note: “Friendly” does not mean “unregulated.” The Malaysian authorities are strict on enforcement, particularly regarding unlicensed exchanges or “shadow” operators.