How to Open a Crypto Exchange in Asia: Licensing & Regulation Guide

Obtaining an Asian crypto license is the most critical step for any entrepreneur aiming to operate a sustainable and trustworthy crypto exchange. While the region offers unparalleled liquidity, the transition toward strict oversight means that only legally sound entities will thrive. By following our strategic framework, you can ensure your company formation and licensing process meets the rigorous demands of the current fintech environment.

Strategic jurisdiction selection: where to incorporate?

Choosing the right base for your exchange depends on your target audience and capital availability. Each jurisdiction offers a distinct regulatory profile and varying barriers to entry.

Option A: Hong Kong (The institutional hub)

The Hong Kong VASP licensing regime became effective on March 1, 2023. This framework brought centralized virtual asset trading platforms under the supervision of the Securities and Futures Commission (SFC).

Applicants must be companies incorporated in Hong Kong or registered non-Hong Kong companies. During the initial phase, licensed exchanges are generally restricted to serving professional investors. This makes the region a primary choice for institutional grade operations.

Option B: Singapore (The global fintech leader)

Singapore regulates digital payment token services under the Payment Services Act. The Monetary Authority of Singapore (MAS) offers two main paths: the Standard Payment Institution and the Major Payment Institution (MPI) licenses.

Most international exchanges require an MPI license in Singapore to handle larger transaction volumes. This license carries a minimum base capital requirement of SGD 250,000. Companies must also appoint at least one resident executive director and maintain a physical office.

Option C: Thailand (The retail-friendly hub)

Thailand offers a mature regulatory structure overseen by the Securities and Exchange Commission (SEC). The capital requirements are higher for centralized exchanges, which must maintain THB 50 million.

The legal structure in Thailand requires a clear separation of business activities. You may need distinct licenses for exchange, broker, and dealer operations. LegalBison assists in structuring these entities to meet Thai SEC standards.

Also read: 5 Reasons Why Asia Is Great for Crypto On/Off Ramping

Option D: Malaysia (The regulated regional gateway)

Malaysia requires crypto exchanges to register as a Recognized Market Operator (RMO) for Digital Asset Exchanges (DAX). This process is strictly managed by the Securities Commission (SC) Malaysia.

To qualify for a crypto license in Malaysia, an entity must be locally incorporated and show a minimum paid-up capital of MYR 5 million. The regulator emphasizes investor protection and requires a local presence for all key personnel. This makes Malaysia a stable choice for operators looking for a regulated entry into Southeast Asia.

The legal framework: company formation & licensing

Launching a compliant exchange begins with correct entity structuring. We help you choose the appropriate corporate form through our company formation services.

Directors and ultimate beneficial owners must undergo a fit and proper test. This process involves a deep dive into financial integrity and professional experience. Regulators in Hong Kong and Thailand are particularly rigorous during this vetting phase.

Local presence is a mandatory requirement in almost every major Asian hub. You will need a physical office and resident directors to demonstrate substance to the regulators. Our team manages the logistics of office setup and corporate bank account opening.

Operational and technical compliance

Safeguarding client assets is the foundation of a licensed exchange. Most jurisdictions now mandate the segregation of client funds from corporate capital. This prevents the commingling of assets and protects users in the event of insolvency.

Following ASIFMA best practices, we recommend a cold storage ratio of at least 97%. Most client assets should remain offline to mitigate the risk of cyber attacks. Multi-factor authentication and regular security audits are standard requirements for license approval.

Establishing a clear token listing framework is also essential. This helps avoid legal conflicts regarding whether a token is classified as a security. A structured internal policy ensures that your exchange remains compliant across multiple borders.

Liquidity and market making

New exchanges often face the challenge of low initial order book depth. Partnering with professional crypto liquidity providers is a common solution. Firms like Wintermute, Galaxy Digital, and Ment Tech offer the depth needed for a smooth user experience.

You must be cautious when engaging in internal market making. In jurisdictions like Malaysia, these activities are under intense regulatory scrutiny. It is often safer to rely on independent third party providers to maintain market integrity.

Your Asian crypto exchange company is just a few clicks away

Asia offers some of the highest rewards in the crypto industry but demands strict adherence to local rules. While the landscape is complex, it is highly rewarding for compliant operators. Dubai also serves as a notable gateway with the VARA regime requiring capital between AED 800,000 and AED 1,500,000.

LegalBison is ready to guide you through the intricacies of Asian fintech law. We ensure your application is comprehensive and your structure is sound. Let us help you secure your future in the Asian crypto market.