If you want to create a well-standing business in the crypto industry, it may be necessary to think about your own crypto exchange company for fast Bitcoin exchange operations and dealings with other cryptocurrencies. Of course, everything, in this case, depends on your concrete business objectives. Our goal is to provide you with a short overview of aspects crucial for creating this kind of company and information you should consider beforehand.
Basics for Starting a Crypto Exchange Company
If you want to start your exchange business, it may be necessary to pass these steps:
Formulate the business objectives you want to realize in a short-term and long-term perspective
You need to have at least a preliminary view of the markets you want to enter. This basic point may greatly determine the final choice of the jurisdiction for the opening crypto exchange company.
Think about the audience to which you want to offer services in the future
This aspect also has a great impact on the final choice of your business strategy. You need to have a clear understanding of the people to whom you will likely render services. This will determine the KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures that should be observed. Such requirements are not only formalities adhering to those is required by respective state authorities. Observing these demands may protect your business from cybercriminals, scams and various types of fraud.
Find management for a future company and make other preparatory arrangements
You should have sufficient control over the future company’s operation. Consequently, think about persons whom you may assign for managerial roles. Usually, crypto exchange companies are registered abroad. So, the requirements of the local legislation should be maximally adhered to by a businessman. For instance, you may need to observe a requirement of having a director who is a local resident. Other important demands of similar nature also may be compulsory for being observed. That highly varies depending on the case.
Another point is arranging the registered office for your future crypto, including Bitcoin, exchange company. It should have contact details and be available for possible audits carried out by the respective regulatory authorities.
Usually, this kind of company needs a certain amount of statutory capital. In this case, the necessity of depositing such an amount may also exist. Trade engines, user interface, wallets, and admin panels – all these things also should be considered and at least partially arranged beforehand.
These are only basic aspects that may need to be considered. Everything here depends on whether you want to register a company or buy the existing one, what kinds of operations you are going to conduct and what is the scope of such. This should be evaluated on a case-by-case basis only.
Obtaining a crypto exchange license
Nowadays, it is difficult to imagine a well-standing jurisdiction that has not made crypto exchange activity regulated. For exchanging any cryptocurrencies, including Bitcoin, an exchange license is required in any case. An exchange cryptocurrency license may have variations. It may be designated for conducting exchange operations with (i) cryptocurrencies only or (ii) conventional currencies to cryptocurrencies.
This license is obtained from the respective local regulatory authority by fulfilling the list of legally determined requirements. The obvious advantage, in this case, is that such a process is usually straightforward and clearly regulated with specific timeframes and requirements an applicant needs to meet. Another aspect about requirements is that you need to adhere to such in the future too for keeping your license active. This aspect is also strongly determined by the concrete jurisdiction(-s) you are considering at the moment.
Arranging cooperation with a bank or payment operator
That aspect is of crucial importance. It is necessary to choose trustworthy financial institutions with active licensees and a good reputation to make your service more reliable for future customers. Quick cash clearance is one of the major points that have to be emphasized while making your choice in this aspect.
Implementation of security and data protection measures
As you are going to carry out online transactions only and will deal with personal data, sufficient security measures should be implemented in any case. Among these methods we can name at least encryption, making backup copies, two-factor identification, Google ReCaptcha and devise tracking. The concrete range of security measures depends on the scope and variety of operations you are going to conduct through this company. In terms of data protection, applicable provisions of the legislation also should be observed, like provisions of the GDPR. Theft, fraud, PC failures are major cyber threats that have to be prevented.
Thinking about the liquidity
Think about the approaches you are going to apply for arranging fast sales and purchase operations on your future platform. The main goal, in this case, is arranging operations with digital assets quickly and easily. Establishing a good support option, API interface, connecting to the networks of crypto exchanges can, among others, facilitate better liquidity for your future crypto exchange company.
Shortlisting all these approximate aspects attributed to opening a crypto exchange company may appear too complicated only at first glance. Practically, it is possible to review all applicable regulatory and compliance requirements, arrange the process of company registration (purchase) and obtaining a crypto exchange license within a reasonable period of time and the same reasonable costs.