Payment and trading platforms, which national regulator AMF requires to obtain licenses for cryptocurrency, are entering the local market. The authorities of the principality officially regulate financial products based on crypto-instruments as derivatives, operations with which require authorization.
The position of local regulators regarding crypto assets
The Financial Supervisory Commission emphasizes that work with crypto assets is operational throughout the territory of Monaco exclusively within the framework of the current legislation, without special regulation. This activity is also high-risk, as it is not supported by any guarantees.
The regulator does not diminish the importance of blockchain technology, but at the same time focuses the attention of persons who intend to invest in crypto assets on the need to:
- ensure that the issuer of cryptoassets has the right reputation (his registration, location, availability of work permits, the size of the founding capital, the reputation of management, etc.);
- form an understanding of the nature of crypto assets, transactions with which will be carried out;
- assess the risks associated with crypto assets;
- evaluate the protection measures for crypto assets that are stored;
- analyze the liquidity potential of crypto assets, as well as the risks associated with it.
General rules for cryptocurrency licensing
In controlling FinTech business, Monaco relies on European directives and the principles of its closest neighbor – France (as well as in dealing with a wide range of other financial and legal issues). Therefore, to license a crypto-exchange, an exchanger, or a supplier of virtual financial products/services you will need to open a company in the principality. When registering a company or acquiring an existing business, you will need to contact the government – it issues permits and consent to the owner change. The share capital of the organization establishing (partnerships, companies with limited liability, joint-stock companies, etc.) must be at least 150 thousand euros.
European directives and internal rules oblige non-residents to open “physical” offices, renting or buying premises. To obtain a license for the cryptocurrencies exchange, at the request of the EU, the owners must:
- hire staff and directors – an experience and education in the financial field is obligatory for the latter ones;
- open a bank account for transactions, daily activities;
- hire employees to monitor compliance with AML legislation requirements – to counter criminal money laundering and terrorist financing;
- prepare descriptions of hardware and software to confirm that there are enough capacities to work;
- compile and provide the regulator with KYC documentation.
The process of obtaining a cryptocurrency exchange license in Monaco covers the following approximate steps:
- Opening a local company.
- Collection of data about the founders, management, and beneficiaries of a crypto company.
- Developing a work plan and policies for the company, including compliance issues.
- Registration and formation of a package of documents for registering cryptocurrency exchange license in Monaco, payment of the relevant fees.
- Submission of a package of documents for registration with the subsequent provision of further details on request.
- Obtaining a license in case of approval.
This list of steps is approximate. “Prifinance” lawyers will be happy to consider each case separately and draw up an individual action plan for obtaining a cryptocurrency exchange license in Monaco.
Opening a crypto company
To obtain a cryptocurrency exchange license in Monaco, you must first register a legal entity. This process covers the following steps:
- Defining the business goals of the future crypto company.
- Identification and clearance of the name for a legal entity.
- Collection of data about the founders, beneficiaries, and managers of the company, including data that confirms their proper reputation and the absence of problems with the law.
- Search for a legal address for a future crypto company.
- Formation of the authorized capital of the company.
- Creating and formatting constituent and registration documents.
- Submission of a package of documents for consideration.
- Registration of a company and obtaining a permit to conduct business activities.
After completing the registration procedure, the created company can apply for a cryptocurrency exchange license in Monaco. Further, it will be required to carry out several mandatory actions.
Compliance basics
The AML regulations operating over Europe provide that exchanges and companies that have received a license for cryptocurrencies must comprehensively analyze risks (conduct due diligence), keep records of “suspicious” transactions and notify law enforcement officers about them. To operate, internal regulations are needed to reduce the risk of criminal money laundering and security policies.
In general, there is a broad range of requirements in this area. But each company receiving a cryptocurrency exchange license in Monaco must, inter alia:
- assess the risks regarding the products it works with, focusing primarily on the nature of the assets and the nature of the transactions that will be carried out with them;
- develop internal policies for working with crypto assets;
- appoint persons authorized to comply with the norms of the relevant legislation, including the identification of suspicious transactions;
- constantly monitor operations with crypto assets;
- request and store data about customers of the cryptocompany;
- identify suspicious transactions and conduct thorough inspections regarding them;
- inform the regulatory authorities about cases of transactions that demonstrate a reasonable risk of illegal laundering money and financing of terrorism;
- educate employees who work with crypto assets.
This is an approximate list of actions that any company should follow when working with crypto assets in Monaco. “Prifinance” lawyers will be happy to develop an action plan, taking into account the specifics of your business.
“Prifinance” experts assistance
The Prifinance company will help to draw them up, register a business and obtain a cryptocurrency exchange license in Monaco, as well as in other jurisdictions. We will provide the full range of support, help you launch a promising business without spending time and effort. “Prifinance” takes over preparatory actions, collection and execution of necessary documents, opening a company and a bank account for it, as well as further support of the company’s activities in Monaco and abroad. We will be happy to develop specific solutions to solve your business problems.
