Setting up a crypto otc desk

[carlosbl]

Hi to all,

I am thinking about setting up a crypto otc desk, oriented to large investors, corporates and institutionals, in order to do all kind of fiat-to-crypto, crypto-to-fiat and crypto-to-crypto transactions.

For the fiat banking, I have already a solution.

From the legal point of view, I guess it should be regulated in a jurisdiction, i.e. it should have a crypto license, although it will work worldwide.

What would be your suggestion about the jurisdiction, from 4 points of view: initial costs, taxation, legal and compliance?

Thanks in advance.

 

[Sols]

Estonia is the most mature and quite cheap/fast. Malta is also worth a consideration, but you will need much more capital and the regulator is still quite inexperienced with crypto licenses.

Other than those two, you have for example Gibraltar, Jersey, Philippines, and the FSA in Isle of Man is open to discussions. But none of them is quite on the same level as Estonia.

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This is the probably the answer to your question.

 

[carlosbl]

Is there any other option in Asia? Hong Kong, Singapore?

 

[CaptK]

To be honest if banking is not a problem look at the easier jurisdictions like Vanuatu, Cook Islands, and SVG

 

[carlosbl]

CaptK said:
To be honest if banking is not a problem look at the easier jurisdictions like Vanuatu, Cook Islands, and SVG
Click to expand...

I think with these jurisdictions it is going to be a problem to get a proper crypto friendly bank account.

 

[Sols]

Singapore, no. MAS has taken a stand-off approach to crypto. They are allowing experiments and voluntary registration, but not outright licensing of crypto.

Hong Kong, maybe. They have legislation in place but AFAIK only one license issued, in late 2020. But with China increasing its influence over Hong Kong and China historically being hostile towards crypto, I'd think carefully before starting a crypto business in HK.

IIRC, Labuan also has something but you need to show 10 million MYR in capital.

If you want a license, there's good reason why most have opted for Estonia and a handful are in the process of getting licenses in Malta as well.

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This is the probably the answer to your question.

 

[carlosbl]

What about Dubai, any option there?

 

[Sols]

No crypto licenses in UAE. You can have discussion with with DFSA, DMCC, and other authorities and entities/free zones about your particular business, but there is no straightforward crypto license regime available in the UAE.

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This is the probably the answer to your question.

 

[carlosbl]

What about BVI, or something else in America?

 

[CaptK]

carlosbl said:
I think with these jurisdictions it is going to be a problem to get a proper crypto friendly bank account.
Click to expand...

carlosbl said:
Hi to all,

I am thinking about setting up a crypto otc desk, oriented to large investors, corporates and institutionals, in order to do all kind of fiat-to-crypto, crypto-to-fiat and crypto-to-crypto transactions.

For the fiat banking, I have already a solution.
Click to expand...

You said banking is not a problem?

UAE is difficult and a lot of hopes to jump.
I am waiting for my licence for 6 months now. If you have the might of Kraken you get it immediately others without a USP will have to take a ticket.

 

[Sols]

You can have discussions with the financial service authorities in BVI, Cayman, and Bermuda or better yet go via one of the major law firms. There might be ways to make it work depending on the exact nature and structure of your services.

But there's absolutely nothing like Estonia for crypto licensing that's well established, popular, and understood by financial institutions.

Toggle signature
This is the probably the answer to your question.

 

[carlosbl]

CaptK said:
You said banking is not a problem?

UAE is difficult and a lot of hopes to jump.
I am waiting for my licence for 6 months now. If you have the might of Kraken you get it immediately others without a USP will have to take a ticket.
Click to expand...

Banking is not a problem in my case if I get a license in Estonia or in Swizerland, because I am Spanish and it has sense to establish in Europe. If I go to a exotic place, it will be much more difficult.

 

[carlosbl]

Sols said:
You can have discussions with the financial service authorities in BVI, Cayman, and Bermuda or better yet go via one of the major law firms. There might be ways to make it work depending on the exact nature and structure of your services.

But there's absolutely nothing like Estonia for crypto licensing that's well established, popular, and understood by financial institutions.
Click to expand...

Definitely I will get a license in Estonia.

 

[CaptK]

carlosbl said:
Banking is not a problem in my case if I get a license in Estonia or in Swizerland, because I am Spanish and it has sense to establish in Europe. If I go to a exotic place, it will be much more difficult.
Click to expand...

You can buy a License in Estonia or you can apply from scratch. It takes about 3 months and costs about €25K and running cost of €2K per month.

 

[carlosbl]

CaptK said:
You can buy a License in Estonia or you can apply from scratch. It takes about 3 months and costs about €25K and running cost of €2K per month.
Click to expand...

What agency would you recommend to get the license?

Last edited: Feb 25, 2021

 

[Don]

carlosbl said:
What agency would you recommend to get the license?
Click to expand...

Hi!

I can recommend my company IBCCS TAX.

To answer your question, Estonia is a good place for a crypto company because:
initial costs - lowest
taxation - you can avoid paying corporate tax if you don't withdraw dividends
legal and compliance - Estonia has been the forerunner in Crypto legislation. In 2017 Estonia was the first country to implement the EU Directive 2015/849, which made Estonia the first country to establish the legal framework for virtual currencies in Europe.

By the way, as a possible solution, you could also establish a branch in Estonia with a crypto license.

Feel free to pm me for more information.

 

[CaptK]

carlosbl said:
What agency would you recommend to get the license?
Click to expand...

PM me to discuss.