TOP Shortlisted Legal Requirements for a Crypto Exchange

Dealings with cryptocurrencies have ceased to be new trends. But, they are still one of the most popular current economic trends. If you want to get maximum benefits from those, you may consider the option of founding your own cryptocurrency exchange. That is a promising opportunity for making investments and arranging your business well. 

This may appear to be complicated at first glance. In fact, while realizing your crypto business objectives, you may need to know and comply with certain legal requirements only. Surely, such demands vary depending on the jurisdiction. Still, there are points that have to be considered for any case of launching a new cryptocurrency exchange.

Basic Considerations: Governmental View

Cryptocurrencies draw great attention from respective local authorities in any jurisdiction that cares about its profile. Consequently, such regulatory bodies, earlier or later, develop and publish their opinions concerning cryptocurrencies in general and various operations with it, in particular. These points are the major ones to review while considering any particular jurisdiction for launching your cryptocurrency exchange business there. Such local guidelines will reveal the general approach and possible obstacles you may face as well as opportunities also. That depends on the reviewed case.

License Requirements

In most well-standing jurisdictions, trading deals with crypto assets and the operation of cryptocurrency exchanges are subject to obtaining a cryptocurrency license. In general, there is nothing too complicated about that – only the set of licensing requirements should be observed before submitting an application for obtaining a crypto exchange license and afterwards. 

For instance, it is required to have a business plan. You also need to track your customers and collect their personal data for arranging KYC (Know Your Customer) procedures. In certain cases, companies may be audited by the respective regulatory authorities. If you want to arrange your operation through a law firm cryptocurrency, this option also has its own peculiarities. The exact range of legislation requirements necessary to adhere to varies depending on the jurisdiction and a concrete business case.

Trading Rules

To make your business lawful, you need to observe certain trading rules additionally to obtaining a cryptocurrency exchange license. Most of the well-standing jurisdictions have already established a certain regulatory framework that enables the prevention of various illegal and suspicious transactions. That is not only a public interest but also a matter of your security and the security of your customers.

Depending on the nature of crypto, it may be regulated under separate legal regimes, like for futures, swaps and other financial instruments. Crypto may also be treated as a commodity – and that will be another story of regulation. To make all things done well, you need to be clear of the nature of crypto you are going to deal with in the future. This may prevent you from fraud, illegal proceeds, and sanctions from the state authorities.

Promotional Activities

Arranging these activities for your cryptocurrency exchange also should be in line with the applicable provisions of the legislation. This aspect is strongly related to the nature of crypto you are going to work with. For instance, if such are treated as securities, from the point of the applicable legislation, you need to adhere to specific provisions related to public offerings and provide various checks, for instance.


If you want to launch and operate a cryptocurrency exchange, it is strongly required to think about sufficient security measures. What kind of wallets are you going to use? What security measures you are going to apply for those? How do you want to collect, store and secure the personal data of future customers?

Basically, it is necessary to ensure sufficient encryption and making backup copies of data obtained during the time of operation of a cryptocurrency exchange. Customer tracking and access keys are other important issues that have to be considered while arranging the operation of your exchange.

Ensuring security is impossible without applying sufficient software systems that protect from scams, viruses, hacker attacks, and similar cyber threats. Sufficient support and API interface can facilitate applying security measures dramatically. Security is also not likely possible without two-factor identification and Google ReCaptcha.

Depending on the certain security measures you are going to apply, the legal framework for such may vary. For instance, using certain software requires the observation of respective IP rights at least. Another example is tracking and holding data about devices. If such data is related to the EU citizens, the provisions of the GDPR have to be observed in full.

Legal Support Required at Any Stage

Basically, ensuring the operation of a cryptocurrency exchange requires a sufficient legal agreement between such an entity and a customer. Also, you need to have terms of services and a privacy policy. Additionally, a cryptocurrency exchange should conclude agreements with its partners, for instance, with payments processors and other financial institutions. The variety of legal requirements that have to be adhered to is also extensive. Still, they are usually clear. So, it is easy and straightforward to arrange all business processes based on such well if you involve professional lawyers in your operational team.

Final Words

While launching and operating a cryptocurrency exchange. It is necessary to be aware of and adhere to a number of legal requirements. This covers reviewing respective legal guidelines and requirements concerning the nature of crypto assets, obtaining a cryptocurrency exchange license, offering financial services, dealing with partners and customers. Professional legal assistance may facilitate accomplishing all these and other legal-related matters simply and easily for your business.