Global Crypto Licensing Service | VASP, CASP, DASP

VASP registration is often necessary for custodial business models, but what is the best license for blockchain in general? Does this even exist?

Licenses are not always exactly what a non-crypto blockchain project needs. It’s a maze of regulations. We, at LegalBison, have a detailed understanding of crypto business models and can provide a constructive answer for typical crypto legal questions after hearing just the first few sentences. Questions we receive are:

• Do I need a blockchain software license for the cryptocurrency exchange platform I developed?
• What if I am working on a blockchain legal contracts system?

Better be on the safe side when it comes to doing business in a quickly evolving legal framework. The answer to these questions will vary depending on the nuances of your business model and country-to-country specificities. Sometimes, a simple detail in your business plan can switch everything. Hint: Are you custodial or not?

You don’t want to take the risk of spending time and money building a project just to get your crypto authorisation revoked and to be potentially exposed to criminal charges. Non-compliance with regulatory requirements can lead to significant legal risks, including fines, operational restrictions, or even criminal liability. Ensuring adherence to both local and international laws is crucial to avoid complications and facilitate smooth cross-border operations.

Despite the moving grounds, it is not so difficult. It is always about explaining your business with supporting technical and legal documents. The process is straightforward in almost every case: you need to explain your project, prove your identity, and sometimes deposit a share capital. LegalBison manages all the administrative and regulatory matters for you.

A license or a crypto legal opinion is necessary to avoid legal issues. Blockchain companies need to comply with a set of rules, for example, Anti Money Laundering rules. AML-KYC is almost always in the middle of what the authorities expect from crypto companies. They ensure that cryptocurrency is not being used for criminal proceeds through a company that is registered in their jurisdiction.

Depending on the jurisdiction, the process of getting a crypto exchange license will be vastly different. One will eventually need to incorporate a legal entity, hire a compliance officer, implement robust crypto-license-compliant KYC/AML procedures, and obtain necessary crypto licenses.

It is crucial to secure regulatory approval by meeting all regulatory obligations, which often include regular audits to assess financial health and ensure ongoing compliance with legal standards.

Before jumping into a process, speak to one of our professionals and get the costs and roadmap of a cryptocurrency exchange license.

When considering the best jurisdictions for obtaining a crypto exchange license, there are several factors to take into account. This includes the regulatory crypto framework, ease of doing business, taxes, the cost of operations, and accessibility to crypto-friendly banks.

Offering crypto on- and off-ramping is a crucial aspect of running a successful cryptocurrency exchange. Crypto on-ramping refers to the process of allowing customers to deposit fiat currency into their exchange account and convert it to cryptocurrency. Conversely, crypto off-ramping involves customers withdrawing cryptocurrency from their exchange account and converting it to fiat currency.

One way to offer crypto on- and off-ramping services is by partnering with banks and payment providers. This allows the exchange to leverage the existing infrastructure of these institutions, which can simplify the process of converting fiat currency to and from cryptocurrency. However, it’s important to note that banks and payment providers may have their own regulatory requirements that the exchange must adhere to. Mainly, this is about having a cryptocurrency exchange license in an accepted jurisdiction.

Our professionals have a lot of experience in setting up crypto-friendly payment rails for our clients. To get an offer, get in touch with us.

A crypto company formation refers to the legal process of establishing a business entity within the cryptocurrency industry. It involves registering a company with the relevant regulatory authorities, obtaining necessary crypto licenses and permits, and complying with legal requirements. The process is crucial for any entrepreneur seeking to enter the crypto industry and requires professional guidance to ensure proper adherence to crypto regulations.

Preparing the required documentation, including a detailed business plan, is a key step in the company registration and licensing process, as authorities typically request these materials to assess compliance and business viability.

Since requirements for crypto company formations change almost daily, we monitor crypto-friendly jurisdictions and compare the regulations of crypto in the EU countries, as well as crypto regulations in offshore jurisdictions, regularly.

We assist entrepreneurs in the crypto industry by providing assistance in understanding which jurisdiction to choose, depending on the type of business activity that is going to be pursued. Regulatory bodies play a crucial role in setting and enforcing standards for cryptocurrency exchanges, including licensing, AML, and KYC requirements. It is essential to understand the specific regulatory obligations in each jurisdiction to ensure compliance and successful operation within the regulated cryptocurrency market.

We assist in the full process, starting with understanding which crypto-friendly jurisdiction suits the underlying business model, followed by the incorporation itself, drafting legal documents, such as articles of incorporation, Legal Opinions, partnership agreements, and much more.

All of this is essential in establishing a successful and legal crypto business structure.

To get a crypto license, one should set up a crypto company and get a crypto license. Obtaining regulatory approval and meeting regulatory obligations are crucial steps, as they ensure your business aligns with legal standards and ongoing compliance requirements, which can vary by jurisdiction. We always guide our clients through the full process of obtaining necessary licenses and permits, as well as ensure compliance with regulatory requirements such as Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. This is essential to establish a legitimate business structure within the cryptocurrency industry.

Contact us today to schedule a consultation and learn how we can help you establish a successful crypto business.

To set up an offshore crypto company with a license, you need to first choose the best crypto-friendly offshore jurisdiction, incorporate, and apply for the appropriate licenses. It is essential to prepare all required documentation, such as business plans, proof of capital, and compliance policies, to ensure a smooth licensing process. We at LegalBison are assisting our clients in all of these steps and can draw on the experience of our many clients.

Offshore companies offer several benefits to cryptocurrency businesses, including low taxes, asset protection, lower regulations, lower operating costs, and greater privacy than in non-offshore jurisdictions.

Additionally, obtaining a license to operate legally provides the business with greater trustworthiness, and the options for fiat on- and off-ramping, making it more attractive to investors and customers. A crypto license can also improve access to banking services by demonstrating compliance and credibility to traditional financial institutions, while regulatory oversight enhances investor protection through established security measures and compliance standards.

Starting an offshore crypto company involves several steps that may vary depending on the specific offshore jurisdiction and the type of company you want to set up. It is crucial to understand the regulatory processes involved in each jurisdiction, as these processes determine compliance requirements and can impact the success of obtaining a crypto license.

The exact process and costs always depend on the jurisdiction and the underlying services the company will be providing. We at LegalBison assist clients with a full turnkey solution and help them understand which crypto jurisdiction is the best for the specific project.

When starting an offshore crypto company, you should clearly define the services your company will provide and make sure you understand the regulatory implications of these. It is essential to understand the regulatory obligations specific to your chosen jurisdiction and to prepare all required documentation, such as business plans, proof of capital, and compliance policies, to ensure a smooth crypto license application process. Based on this, we will be able to guide you on which jurisdiction makes sense for you, focusing on the legal requirements and involved costs.

We lead our crypto clients through the legal requirements and assist in making sure all regulations are met properly. We usually assist in preparing all regulatory paperwork involved and setting up the crypto company in offshore jurisdictions.

The regulatory frameworks are very different from jurisdiction to jurisdiction. While some offshore jurisdictions follow FATF guidelines and are very strict, others are great for token issuances (ICOs), for example. Regulatory bodies in offshore jurisdictions play a crucial role in establishing and enforcing standards for cryptocurrency exchanges, with regulatory enforcement and stricter compliance requirements becoming increasingly important, especially as global standards evolve.

Some crypto jurisdictions give you the chance to get licenses for issuing derivatives (options trading) or running a crypto exchange, while others completely prohibit this.

As an example, the Cayman Islands require crypto companies to obtain a virtual asset service provider (VASP) license, which regulates the custody, buying, selling, and trading of cryptocurrencies. To make sure you choose the right offshore crypto license, get in touch with our professionals.

The best jurisdiction for issuing a token will depend on a variety of factors. Mainly: the regulatory environment, tax implications for the underlying business, ease of doing business, and access to investors. However, from our experience, some jurisdictions are more commonly used for token issuance than others.

Estonia, for example, was a popular jurisdiction for token issuance, with a supportive business environment and a streamlined e-residency program that makes it easy to establish a legal entity. Today, entrepreneurs move to other jurisdictions, as the requirements are becoming very strict in Estonia.

Other jurisdictions that are commonly used for token issuance include the British Virgin Islands, Saint Vincent and the Grenadines, and Switzerland. Each of these jurisdictions has its own unique advantages and considerations.

It is important for entrepreneurs to carefully evaluate their options before choosing the appropriate jurisdiction for token issuance and to fully understand the associated regulatory obligations.

To understand when a crypto token is considered a utility or security, it’s important to first understand the difference between a utility token and a security token.

In very general terms, utility tokens are digital assets that are designed to be used within a specific platform or ecosystem. These tokens are not intended to be used as investments, but rather as a means of exchange within a particular network or platform. Utility tokens are often used to access certain features or services within the platform or to pay for goods and services.

Security tokens, on the other hand, are digital assets that are designed to represent ownership in a real-world asset or entity. Security tokens are subject to the same regulations as traditional securities and must comply with securities laws.

This means that the functionality of the token is a key factor in determining whether it is a utility or security. If the token is designed primarily to be used within a specific platform or ecosystem and does not have investment value, it is likely to be considered a utility token. If the token is designed to represent ownership in a real-world asset or entity or has investment value, it is likely to be considered a security token.

It is fundamental to get a Legal Opinion on the nature of your token to ensure regulatory compliance. Obtaining regulatory approval is crucial to ensure your crypto license and operations meet all relevant legal standards, including AML and KYC requirements. If the token is subject to securities laws, it must comply with all relevant regulations, including registration and reporting requirements. If the token is considered a utility token, it may be subject to different regulations, such as anti-money laundering (AML) and know-your-customer (KYC) requirements.

The way the token is marketed can also be a factor in determining whether it is a utility or security. If the token is marketed as an investment opportunity or if the issuer promises a return on investment, it is likely to be considered a security token. If the token is marketed as a means of accessing a platform or ecosystem, it is likely to be considered a utility token.

A Legal Opinion (often referred to as a Legal Memorandum) for an ICO is a formal written statement prepared by a legal professional that assesses the Initial Coin Offering’s compliance with relevant laws and regulations. It mainly focuses on the nature of the token itself.

Often, the Howey Test is used for this process. It aims to understand if, according to relevant crypto laws and regulations, the underlying token is considered a security or would be classified as a utility token.

A Legal Opinion typically covers areas such as securities laws, anti-money laundering (AML), and know-your-customer (KYC) regulations, focusing on other relevant laws and regulations in the jurisdiction where the ICO is being offered. As part of the legal opinion process, it is crucial to prepare all required documentation, including compliance policies, to ensure a smooth and successful crypto license application.

The need for a crypto license when launching an initial coin offering (ICO) depends on the specific jurisdiction and regulations in place. In some cases, a VASP registration may be required for issuing a token, while in others, it may not be necessary.

However, regardless of whether a license is required or not, it is always advisable for crypto and token issuers to seek legal crypto advice and ensure compliance with relevant regulations. This includes registering the ICO with regulatory authorities, adhering to know-your-customer (KYC) and anti-money laundering (AML) policies, and providing transparency around the use of funds raised through the ICO.

The regulatory crypto landscape for ICOs is still evolving, and it is important for businesses to stay up to date on any changes to regulations or crypto licensing requirements in their jurisdiction. By doing so, they can mitigate legal and financial risks and ensure a successful launch of their ICO.

A legal entity provides liability protection to the founders and team members of the ICO project. This means that if there are any legal disputes or claims against the ICO project, the legal entity can shield the individuals involved from personal liability.

Without a legal entity, the individuals involved in the ICO project may be held personally responsible for any legal or financial issues that arise. It is also crucial to understand and meet all regulatory obligations when obtaining a crypto license, including the implementation of robust compliance policies to ensure alignment with legal standards in your jurisdiction.

The legal opinion is important for an ICO issuer to demonstrate to potential investors that the ICO is legitimate and complies with relevant laws and regulations. This can help to build trust with investors and increase the likelihood of a successful ICO. Investor protection is a key aspect of licensing frameworks, and obtaining a legal opinion helps ensure compliance with regulatory requirements, thereby safeguarding investors’ interests.

In addition to providing assurance to investors, a legal opinion can also help the ICO issuer identify and address any potential legal issues before launching the ICO. This can help to avoid costly legal problems down the road.

One of the first steps in starting an NFT company is to form a legal entity, such as a corporation or limited liability company (LLC). This provides liability protection for the owners of the company and ensures that the business can enter into contracts, hire employees, and own assets. It is important to choose the appropriate legal structure and jurisdiction for the company.

In some cases, NFTs may be considered securities, which are subject to strict regulations under federal and state laws on securities (globally). Whether an NFT is considered a security depends on the specific facts and circumstances surrounding the offering.

It is important to incorporate a company and then get a Legal Opinion on the nature of the token to ensure that any NFT offering complies with all applicable securities laws and regulations.

If the NFT does not have any functionality, it will almost certainly not be considered a security. Still, if you plan to sell NFTs, it is important to ensure compliance with securities laws. The easiest way to do this is by the formation of an NFT company and having the entity hold the IP rights of it. Our professionals are well-versed and can help with the whole process.

As NFTs are a relatively new concept in the crypto world, there is no specific regulation that applies solely to NFT companies. However, there are some existing regulations that may apply depending on the specifics of the NFT being sold and the jurisdiction in which the company operates.

It is crucial for NFT companies to understand and meet all relevant regulatory obligations, as compliance requirements can vary significantly between jurisdictions. Aligning with these legal standards is essential for operating successfully within the regulated cryptocurrency market.

The legal classification of NFTs is still a topic of debate, but it is generally determined by the specific characteristics of the NFT in question.

If an NFT is marketed primarily as an investment, it may be considered a security. On the other hand, if the NFT is marketed primarily for its utility value (such as granting access to a platform or service), it may be considered a utility.

If buyers of an NFT expect to profit from their purchase based on the efforts of others (such as the creator or a third-party promoter), the NFT may be considered a security. On the other hand, if buyers purchase the NFT for its utility value or because they simply enjoy owning it, it may be considered a utility.

Crypto NFT companies are subject to various tax regulations and must comply with them to avoid penalties and legal issues. The taxation of NFTs varies depending on the jurisdiction where the company issuing these is registered. Generally, NFTs are considered assets and are taxed accordingly.

Crypto NFT companies are subject to corporate income tax on their profits. The tax rate may vary depending on the jurisdiction.

An NFT company needs to have legal documents in place to govern the sale of NFTs to buyers. Preparing the required documentation, such as business plans, proof of capital, and compliance policies, is crucial for NFT company operations and is often a key part of the crypto license application process in many jurisdictions.

One of the key legal documents required is the Terms of Sale, which sets out the terms and conditions under which the NFT is being sold to the buyer. This document outlines the ownership rights of the buyer in relation to the NFT, the conditions for transfer of ownership, and any warranties or representations made by the NFT company.

Other important legal documents should be discussed depending on the exact underlying project.

In general, having a suite of legal documents in place can help protect the NFT company and ensure that the sale of NFTs to buyers is conducted in a lawful and transparent manner.

Speak to our professionals to find out how we can help.

Getting a legal opinion on an NFT will be a crucial step in ensuring compliance with applicable laws and regulations. The legal opinion should presumably cover securities and anti-money laundering laws. A crypto legal opinion may also address the specific characteristics of the NFT, such as its use cases, the type of asset represented, and the terms of the sale. Obtaining regulatory approval and ensuring compliance with all relevant crypto license requirements is essential when seeking a legal opinion for NFTs.

When assisting our clients in preparing a Legal Opinion, we require a basic understanding of the token at hand. Mostly in the form of a whitepaper or litepaper. We may also review this document and provide you with professional guidance.

Since DeFi companies provide financial services (often), without the need for traditional intermediaries, and given the fact that the regulatory landscape is very unclear, it is especially important to have a legal entity to limit personal liability.

While DeFi companies may not handle fiat currencies, they may deal with cryptocurrencies, making it important to consider whether a crypto license is required.

In many jurisdictions, DeFi companies are not currently subject to specific regulations or licensing requirements. It is important to understand that certain AML and KYC obligations still apply and fall upon the provider of these services. Obtaining regulatory approval and ensuring compliance with relevant crypto regulations is crucial for DeFi projects to operate legally and build trust with users.

To speak about the details of the requirements, please indicate when requesting a consultation that you are running a DeFi Company and need corporate assistance.

There may be some legal grey areas in terms of what legal documents are required. However, since the company provides access through its interface (website) to the protocol, it is crucial to limit the personal liability of the shareholders/founders.

A DeFi company should prepare a set of documents to ensure compliance with regulations and to protect both the company and the users. Preparing the required documentation – such as business plans, proof of capital, and compliance policies – is essential for obtaining a crypto license and for smooth DeFi company operations.

Since DeFi is a growing area in the crypto industry, regulatory authorities are beginning to take notice of this. Even though KYC and AML contrast with the open and permissionless nature of many DeFi protocols, where anyone can participate, the implementation of KYC regulations for these companies will depend on the jurisdiction in which the protocol operates.

Regulatory bodies play a key role in setting and enforcing KYC and AML standards for DeFi companies, ensuring compliance and helping to establish industry-wide best practices.

Some jurisdictions have already implemented KYC and AML regulations for cryptocurrencies and crypto businesses, and it is likely that DeFi protocols will eventually be subject to similar regulations.