Cryptocurrency License in Asia: how to get, price, what you need to know.
Singapore and Hong Kong are two of the most popular Asian jurisdictions for cryptocurrency startups. Other regions providing favorable conditions for such projects are South Korea and Taiwan, although these two jurisdictions are less popular. This article gives you a detailed account of the advantages of crypto exchange licenses in Singapore and Hong Kong, some of the most developed Asian countries, and explains how to obtain one.
Best Asian jurisdictions to get a crypto license
So, you have decided to get an Asian crypto license. But which country to choose? We recommend looking in the direction of Singapore and Hong Kong. These two jurisdictions have created perfect conditions for companies working in the cryptocurrency business in terms of both business possibilities and the loyalty of their regulatory authorities to such ventures. Below we tell more about the requirements for such companies in Singapore and Hong Kong.
Crypto license in Singapore
Singapore is one of the largest crypto and blockchain centers in Asia and globally. The country has a well-developed banking system that fits the crypto companies perfectly. There are also financial incentives, plus, the digital economy of the region is very supportive of local businesses.
How to get a crypto exchange license in Singapore
As per Singapore legislation, licensing is obligatory for the companies providing the following services:
- Cryptocurrency trading (purchase, sales);
- Cryptocurrency trade facilitation (for crypto trading platforms);
- Cryptocurrency transfers between accounts.
If a legal entity wants to work in this sphere on the territory of Singapore, it must obtain a license. The main authority managing the licensing process and the activities of such ventures is the Monetary Authority of Singapore (MAS). The regulator issues permits of three types:
- currency exchange license;
- standard payment organization license;
- large payment organization license.
Here is what you need to get a crypto license:
- A company registered in Singapore. It may be registered in another country, in this case, you will need to open a Singapore branch.
- A local office.
- The company’s executive director must be a Singapore resident. Another option is to appoint two directors: a non-executive director (a citizen or resident of the country) and an executive director holding a Singapore work permit.
- Directors, founders, and shareholders with good reputations.
- Qualified personnel.
- KYC and AML policies.
- Implementation of policies preventing money laundering.
- Internal and external audit.
- Authorized personnel deposit.
The permit is usually issued within 12 months. License holders must pay yearly license fees and commissions the amount of which depends on the license class.
Hong Kong crypto license
Hong Kong does not have specific legislation and regulatory acts that would provide for the status of cryptocurrencies and crypto companies. However, to operate cryptocurrencies, legal entities must obtain a license. The requirements for the companies working in this sphere depend on how local authorities classify different virtual assets. These may be of two types:
- Virtual Commodity (asset) — virtual goods (Bitcoin, Ethereum, etc.);
- Security Token — securities tokens (securitized assets, certain ICO tokens, etc.); i.e. such cryptocurrencies or derivatives that possess the qualities of securities traded on urgent and stock markets.
In Hong Kong, it is the Securities and Futures Ordinance (SFO) that is responsible for awarding the Virtual Commodity status to cryptocurrencies. The activity of companies working on their exchange is not subject to licensing.
When we talk about Security Tokens, those wanting to operate them must apply for a license with the SFO. Companies working with such assets must:
- Offer tokens classified as securities only to professional investors;
- Proceed with the checkups of their crypto assets to assess the risks for the Central Bank market players;
- Comply with the AML policy;
- Disclose essential information regarding the security tokens;
- Inform about suspicious operations.
To launch a crypto exchange in Hong Kong you need to obtain one of the two licenses:
- Money Service Operator license, necessary to facilitate the exchange of cryptocurrencies to fiat money;
- SFC License, issued for exchange and other transactions with cryptocurrencies possessing securities features.
The Hong Kong requirements are quite similar to those of the Singapore regulator and agree on the majority of essential provisions.
However, the Hong Kong regulator is working on a new licensing system for crypto companies. The anticipated provisions have been outlined in the Anti-Money Laundering and Counter-Terrorist Financing Bill of 2022 (the Amendment Bill). The document is currently pending approval by the Legislative Council of Hong Kong (local single-chamber legislative body).
New regulations will require local crypto companies and non-resident ventures, which are actively promoting their services in Hong Kong, to obtain a license from the SFC as companies operating virtual assets (VA). At that, trading non-fungible tokens (NFT) shall not be subject to licensing.
The law is to take effect on March 01, 2023, and the legislators have provided for a transitory 9-month period for the existing crypto companies to give them time to adapt to new regulations and apply for a license by December 01, 2023. Such applicants shall enjoy a temporary license regime until their requests are considered by the SFC.
How to apply for a crypto license in Asia
If you are interested in obtaining a crypto license in Asia (Singapore, Hong Kong, and other jurisdictions), you now have a chance to do so with the assistance of our company. License issuance is a rather lengthy procedure and it is advisable to seek professional legal guidance. We have been working in the field for a long time and are familiar with all the details and peculiarities of obtaining Asian crypto permits. Our experts guarantee you round-the-clock legal support and turn-key service that will help you get your license within the shortest term possible. You can contact us via the online chat on the website, or call the phone numbers quoted in the “Contacts” section.
Prices for crypto license applications in Asia
The license application service cost depends on a large number of factors and the specific requirements of each client. To calculate the expenses in your case, you need to book a consult with our lawyers. This will help you decide what services exactly you need and what the final amount will be.