Great Britain is one of the largest economies for crypto and blockchain-related ventures. Bitcoin mining, e-money trade, various other types of digital commerce are at an all-time high over in the UK. The general consensus at the moment is that the GB and its overseas territories (Gibraltar, for instance) can become THE ultimate option for any and all blockchain start-ups and ICOs. In GB, BTC is equated with private money, which is a very important piece of information to take into consideration for those that seek to obtain a cryptocurrency trading license in the UK. The best options you can get here:
The main regulatory body, the Financial Conduct Authority (FCA), authorizes digital currency businesses to ensure they meet the guidelines and comply with the monetary policies adopted by the central bank of the United Kingdom. The FCA is notably progressive in its approach to digital money: all higher-ups seem to accept the fact that crypto is an inevitable future. Some of the most promising in-house blockchain start-ups even qualify for FULL state support. However, it must also be noted that the UK is by no means the easiest place to operate for crypto entrepreneurs: there is still much ado about the accessibility of cryptocurrencies, as well as the minor issues associated with the KYC
Two Main Types of Crypto Accreditations in the UK
These are two main types of authorizations:
1. Crypto-Asset Exchange Providers
Companies that need to apply for this type of UK cryptocurrency license provide the following services:
- Exchanging digital money for fiat currency or vice versa;
- Exchanging one cryptocurrency asset for another;
- Indirectly exchanging digital money for fiat currency or vice versa by managing the equipment that carries out those tasks in an automated fashion.
2. Custodian Wallet Providers
Businesses with this type of license provide the following services:
- Keeping the clients’ digital assets;
- Keeping the clients’ encrypted private keys which ultimately can be used for storage or transfer of digital assets.
Selecting the right type of crypto accreditation is vital for any business that wants to expand its operations into the United Kingdom.
How to Get a Cryptocurrency License in GB?
To receive full accreditation as a legal business in Great Britain, you need to:
- Create a legal entity (has to have a real office) that is subject to taxation. The companies with blockchain licenses UK are required to pay a corporation tax on profits from the exchange of crypto assets. No VAT is due when it comes to the income received from cryptocurrency mining activities. This is one of the more progressive tax policies implemented so far in the UK.
- Open bank accounts. Even though this step might seem difficult, it is actually anything but difficult. As a rule of thumb, it takes only one day to get a UK bank account.
- Prove that the business adheres to the AML/CFT guidelines.
- Prepare all the paperwork required for the obtainment of a license, including a business plan, a risk management plan, and several other documents. This could be done with the help of a lawyer, financial advisor, accountant, or consulting firm that has experience working with cryptocurrencies.
Frequently Asked Questions
Q: I don’t have time, but I do have money. Is it possible for me to purchase an already existing company with the apt license?
A: Theoretically, yes. If you were to find a reputable enough firm that helps with the process of obtaining a cryptocurrency trading license in UK. However, bear in mind that you will be taking on risks as a buyer. For instance, your potential investment could be threatened by legal actions taken by the founders of the company if you fail to conduct thorough enough due diligence on them.
Q: Are there any restrictions when it comes to shareholders?
A: There are no restrictions when it comes to stakeholders unless they originate from blacklisted countries (North Korea, for instance).
Q: What’s the timeframe for providing information to the Companies House?
A: All accounts must be delivered by the deadline date. Holders of a blockchain license UK can look up their business’s tax filing deadlines on the Companies House’s official website.
Q: What is the lowest price possible for setting up a crypto business in the UK?
A: In our estimation, it’s somewhere between $1520 and $1600. The UK is not the cheapest jurisdiction, so it’s usually better suited for businesses that have sufficient financial resources.
Q: Can a legal entity become a stakeholder?
A: Yes, it can. Keep in mind that the UK Financial Intelligence Unit (UKFIU) will still ask for proof of no criminal record (as a business entity).
Q: Are There Any Similar Jurisdictions?
A: Ireland, Liechtenstein, Germany, and France are all similar enough options, albeit for different reasons. It is impossible to ascertain which option is going to be better suited for your specific business without a detailed analysis.
Future of Crypto-Related Regulations in the United Kingdom
After leaving the European Union in 2022, the GB became largely unpredictable in many aspects, including the one related to cryptos and relevant state policies. The chances are, they will eventually start to diverge from Europe’s current regulations. Companies that plan to receive a UK cryptocurrency license must keep a close eye on the global news in order to stay in the loop about the most important decisions made by the powers that be.
Recent reports suggest that the Bank of England seeks to strengthen the regulation because the digital market continues to expand in scope and more people are looking to adopt cryptos. It is also important to note that decisions regarding cryptocurrencies are now made by fairly cautious lawmakers that oftentimes use either the EU or the US as a blueprint. While some of the more brazen officials have promised that new laws will soon come into force, it seems that nothing much will happen anytime soon. The latest newsworthy occurrence was Britain’s halfhearted crackdown on Finance.
Is It Possible to Stay on Top of Everything?
As you can ascertain, the UK’s regulatory framework is not fully formed, which creates a barrage of risks for those that are interested in a blockchain license UK. In case you want to minimize the possible hazards, it is advised to seek out professional help.
Certain companies can help you set up a legal entity, obtain a crypto license in the UK (or elsewhere), open numerous local bank accounts, and deploy a thriving business in the shortest amount of time possible. Furthermore, you will receive help when it comes to choosing the best possible taxation model.