Published: 22.05.2018 blog
The UK’s Money Laundering and Terrorist Financing Regulations 2017 defines a crypto asset as a cryptographically secure digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored or sold electronically. and includes a right or interest in a crypto asset (14A(3)(a) and (c) ML Regulations).
In 2019, the Financial Conduct Authority (FCA) published “Guidance on cryptoassets” which outlines three broad categories of tokens based on how they fit into existing FCA regulation:
• e-money tokens tokens (electronic money tokens) comply with the definition of electronic money and in the Electronic Money Regulations 2011 (EMRs) – in general, these are digital payment instruments that store value, can be redeemed at face value at any time and offer holders a direct claim on the issuer;
• security tokens (investment tokens) have characteristics similar to specific investments, such as shares or debt instruments, as specified in UK law, tokenized digital forms of traditional securities.
• unregulated tokens (unregulated tokens) include:
– utility tokens are used to purchase a service or access to a DLT platform – this may, for example, include access to online cloud storage;
-exchange tokens (exchange tokens) are mainly used as a medium of exchange, including well-known crypto assets such as bitcoin, ether and XRP.
Crypto assets can serve a wide range of functions, from trading in digital collectibles to raising capital for new projects.
Since January 10, 2020, changes have been made and the powers of the FCA in the field of crypto-activities of companies in the UK have been significantly expanded.
If your company’s activities are related to cryptocurrencies, you need to obtain a cryptolicense in the UK, officially known as the FCA AML/CTF Crypto Asset Registration Regime.
With lawyers of our company, you can easily go through all the steps to obtain a license to conduct activities with crypto assets.
The amount of the state duty
£2,000 – For businesses with UK crypto asset income up to £250,000. £10,000 – For businesses with UK crypto asset income over £250,000.
Requirements for board members and geographical location
Company structure: at least one shareholder (individual or legal entity, no restrictions on citizenship or place of residence) and one director (foreign residents are allowed)
Legal address – required
Minimum document requirements for applying for a license
The FCA will need some key information:
1. Program of Operations: identifying specific areas of activity for crypto assets for business.
2. Business plan: definition of business goals, customers, employees, management, plans and forecasts.
3. Marketing plan: including a description of customers and distribution channels.
4. Structural Organization: A description of how your business is structured and organized.
5. Systems and controls: Provide details of key IT systems.
6. Detailed information about individuals, beneficial owners and close relationships.
7. Mechanisms of management and internal control.
8. Description of the anti-money laundering/terrorist financing system and risk assessment.
9. Agreements and processes for customer adaptation.
10. Customer due diligence and enhanced due diligence procedures that meet the minimum standards required by regulations.
11. Budget projections and financial performance for the first three financial years.
LEGAL ADVICE ON THE POSSIBILITY OF OBTAINING A LICENSE, OPENING A BANK ACCOUNT
COMPANY REGISTRATION, LEGAL ADDRESS
OPENING A BANK ACCOUNT WITH A PAYMENT SYSTEM OR A BANK
DEVELOPMENT OF PROCEDURAL DOCUMENTATION AND POLICIES, PREPARATION OF A COMPLETE PACKAGE OF DOCUMENTS, COMPLETION OF THE APPLICATION AND REGISTRATION OF THE COMPANY WITH FCA
FULL LEGAL SUPPORT AND COORDINATION WITH THE FCA FROM SUBMISSION OF DOCUMENTS TO COMPLETION OF THE REGISTRATION PROCEDURE
ACCOUNTING AND LEGAL SUPPORT OF THE COMPANY