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The cost of getting a crypto exchange license depends on the jurisdiction you choose. The licensing cost includes state licensing fees, surety bonds, net worth requirements, AML bonds, and the total setup cost of a crypto exchange under the Prevention of Money Laundering Act.
We will see the cost of getting a crypto exchange license and how long it takes in different jurisdictions.
If someone wants to start a crypto exchange, then they must get a crypto exchange license. A crypto exchange license is the legal authorization that allows businesses to provide cryptocurrency services such as trading, exchange wallets, or blockchain services.
There are certain conditions asked by the regulatory authority that the exchange must comply with the requirements of cryptocurrencies, AML compliance, and KYC requirements. It is a mandatory registration every business needs to follow; if they don’t, then they may not be able to operate as a crypto exchange provider in their preferred jurisdiction.
How Much Does a Crypto License Cost in Different Countries?
The cost of getting a crypto exchange license varies depending on the jurisdiction. Each country has a certain license cost based on the business model, AML requirements, type of services, and more.
So, it is a mandatory step for businesses to review each country's licensing costs and licensing requirements. Below, we will see the cost of top crypto exchange service-providing countries and their license costs.
Dubai (VARA)
To operate as a money service provider in Dubai, you need to get a VARA license. It is highly favorable for businesses that want to launch their exchange in Dubai. Their cryptocurrencies are globally recognized and trusted.
The VARA activities and the license application fees are listed below:
|
S.NO |
VA Activity |
Licence Application Fee |
Annual Supervision Fee |
|
1. |
Advisory Services |
AED 40,000 |
AED 80,000 |
|
2. |
Broker-Dealer Services |
AED 100,000 |
AED 200,000 |
|
3. |
Category 1 VA Issuance |
AED 100,000 |
AED 200,000 |
|
4. |
Custody Services |
AED 100,000 |
AED 200,000 |
|
5. |
Exchange Services |
AED 100,000 |
AED 200,000 |
|
6. |
Lending and Borrowing Services |
AED 100,000 |
AED 200,000 |
|
7. |
VA Management and Investment Services |
AED 100,000 |
AED 200,000 |
|
8. |
VA Transfer and Settlement Services |
AED 40,000 |
AED 80,000 |
Estonia
As for Estonia, you need to get a MiCA license. Businesses must meet the crypto-asset service provider requirements, including governance, prudential safeguards, and AML-related controls.
The licensing fee starts at approximately €3,000. AML and KYC requirements are mandatory to obtain a MiCA license, as the application includes information about internal controls and procedures for identifying and managing money laundering and terrorist financing risks.
Lithuania
In this jurisdiction too, you need to obtain a MiCA license to operate as a crypto-asset service provider. CASPs are subject to a supervisory contribution of 0.7% of annual revenue, with a minimum contribution of approximately €3,000. Here too, AML and KYC requirements must be strictly followed.
Singapore
Singapore has strict regulations for digital token service providers under MAS frameworks. The application fee for DPT starts from $1,500, and the annual license fee is $10,000.
Their regulations for businesses that want to operate as a digital token service provider require financial capability, compliance with AML and CFT regulations, and other regulatory requirements set by the Singapore authorities.
Cayman Islands
The Cayman Islands allows businesses that provide virtual asset services to register through the Cayman Islands Monetary Authority (CIMA). CIMA says that two fee payments are required.
The license cost is listed below:
|
S.NO |
Fee |
Amount in Cayman Islands dollars (KYD) |
|
1. |
Licence application fee |
KYD 5,000 |
|
2. |
Fee to grant a virtual asset trading platform licence |
KYD 100,000 |
|
3. |
Grant fee for a qualifying local company |
KYD 10,000 |
United Kingdom
In the UK, you must register with the FCA under the Money Laundering Regulations for certain digital asset services. Their registration fee starts at approximately $14,800, and annual fees are also included.
Businesses must follow strict AML and KYC requirements, as the UK has specific regulations for exchanges operating in its jurisdiction.
United States
In New York, if a business wants to operate as a money services provider, it must register with the New York Department of Financial Services (NYDFS). The official applicable licensing fee is £ 11,260, and the annual periodic fee will be a minimum of £ 2,251, plus a variable fee for income above £100,000.
Businesses must comply with the regulatory requirements, which include capital and surety bonds, as well as an annual supervisory assessment fee. If businesses also want to provide fiat money transmission, they need a separate license and fee for that.
Malta
In Malta, a digital asset service provider must obtain authorization under the MiCA framework through the Malta Financial Services Authority (MFSA). The Malta framework includes requirements covering governance, prudential safeguards, client-asset protection, and other regulatory obligations.
The license cost is listed below:
|
S.NO |
MiCA service class |
Official application fee |
|
1 |
Class 1 — Certain crypto-asset services |
€10,000 |
|
2 |
Class 2 — Custody and exchange services |
€20,000 |
|
3 |
Class 3 — Operating a crypto-asset trading platform |
€25,000 |
Spain
To operate a crypto service provider business in Spain, you need to be authorized by the CNMV according to MiCA. The license cost is listed below:
|
S.NO |
MiCA service class |
Official minimum capital |
|
1 |
Class 1 |
€50,000 |
|
2 |
Class 2 |
€125,000 |
|
3 |
Class 3 |
€150,000 |
Class 1: Crypto-asset service provider authorised for the following crypto-asset services
- execution of orders on behalf of clients;
- placing of crypto-assets;
- providing transfer services for crypto-assets on behalf of clients;
- reception and transmission of orders for crypto-assets on behalf of clients;
- providing advice on crypto-assets; and/or
- providing portfolio management on crypto-assets.
Class 2: Crypto-asset service provider authorised for any crypto-asset services under class 1 and:
- providing custody and administration of crypto-assets on behalf of clients;
- exchange of crypto-assets for funds; and/or
- exchange of crypto-assets for other crypto-assets.
Class 3: Crypto-asset service provider authorised for any crypto-asset services under class 2 and:
- operation of a trading platform for crypto-assets.
How Long Does It Take to Get a Crypto License?
Obtaining a license may take different amounts of time depending on jurisdiction, business model, compliance requirements, and completeness of the application. We will provide an approximate timeline for each jurisdiction.
|
S.NO |
Juirisdiction |
Approximate Timeline |
|
1 |
Dubai (VARA) |
2–4 months |
|
2 |
Singapore |
3–6 months |
|
3 |
United Kingdom |
3–6 months |
|
4 |
Estonia |
3–5 months |
|
5 |
Malta |
3–6 months |
|
6 |
Cayman Islands |
2–3 months |
|
7 |
Spain |
3–6 months |
|
8 |
United States (New York) |
6–12 months |
|
9 |
Lithuania |
3–5 months |
Conclusion
Every business wants to start its own crypto exchange in its preferred jurisdiction, but they don't know the licensing requirements and the cost of launching a crypto exchange.
As you have seen in this blog, we have covered the licensing costs and regulatory requirements.
Are you someone who is looking to develop and launch a cryptocurrency exchange in your preferred jurisdiction, Fourchain is the best choice for you. We will guide you through the licensing requirements and costs for a smoother launch of your exchange.
Start your crypto exchange journey with us!
