The crypto trading license allows to act only and exclusively the intermediary between the seller and the buyer. Its task is to define the boundaries of the exchange rate, to ensure the reliability of the transaction and the security of personal data. In this case, the final exchange rate is determined by market principles, depending on the ratio of demand and supply.
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The main feature of crypto trading license.
The importance of crypto trading license
In order to operate in a legal field, the crypto exchange needs a license. Of course, the first exchanges operated without any registration and control by the state, but now it will work much more difficult. After digital assets are incorporated into the legislation of many countries of the world, the exchange of cryptocurrency for fiat money and vice versa can produce only licensed exchanges. Of course, the presence in the legislative field imposes certain duties, for example, to pay taxes and to monitor the legality of operations. On the other hand, the existence of a license gives the possibility of judicial protection by the State, which increases the reliability of the site, including in the eyes of users.
Why do users choose licensed crypto exchanges?
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For many market participants, having a license with the exchange is a guarantee of ongoing operations. There are still some big cryptocurrency scandals out there. Now customers want to know that the company they trust with their money has passed some verification, its existence and the legality of the operations are confirmed by the state. This level of trust on the part of users is worth spending some time on licensing the crypto exchange.
How to choose jurisdiction for crypto trading licensing
Now at least two dozen different states offer more or less favorable licensing conditions for companies engaged in the exchange and sale of cryptocurrency. Among these countries there are offshore, there are countries with standard taxation, and there are states that offer preferential regimes specifically for working with digital assets. In order not to make the wrong choice, you should focus primarily on the countries in which the target audience of the crypto exchange. This will make it easier to conduct banking transactions for users and platform administrators.