Virtual Asset License
A virtual asset refers to a digital representation of value that can be used or traded within a virtual or digital environment. It is essentially an intangible asset that exists only in electronic or digital form, without any physical counterpart. Virtual assets can take various forms, including virtual currencies, and virtual securities.
- Virtual Currencies: These are digital currencies that are used as a medium of exchange within a virtual environment. Cryptocurrencies like Bitcoin, Ethereum, and Litecoin are examples of virtual currencies.
- Virtual Securities: These are digital representations of financial instruments or investment contracts. Virtual securities may include tokens or digital assets that represent ownership in a company, shares, or other financial assets.
Process of getting a Virtual Asset License
The process of obtaining a virtual asset license can vary depending on the jurisdiction and the specific type of virtual assets involved. As virtual assets and their regulation are still evolving, it’s important to speak with professionals that understand the current climate. Here at Desfran, we have been helping our clients obtain regulatory authorisations across the financial sector successfully.
These are the following procedures that will be undertaken:
- Establishing a suitable jurisdiction for the client to establish their entity and prepare for the authorisation.
- Company Formation: Establish a legal entity or company structure that complies with the requirements of the jurisdiction. This may involve registering a company, obtaining necessary permits, and fulfilling any corporate governance obligations.
- Application Process: Preparation of all documentation including business plans, policies and procedures, AML compliance policy, shareholder documentation, company documentation, forms, financial statements, risk management framework, and other key information regarding the beneficiaries.
- Application Submission: Submit the completed application along with the required documentation to the regulatory authority. Pay any applicable application fees.
- Review and Evaluation: The regulatory authority will review the application, conduct an evaluation, and assess whether the applicant meets the criteria and requirements for a virtual asset license. This may involve scrutiny of the business model, security measures, compliance procedures, and other relevant factors.
- Compliance Assessment: In some cases, regulatory authorities may conduct on-site inspections or audits to ensure compliance with regulations and industry standards.
- License Issuance: If the application is approved and the regulatory authority is satisfied with the compliance measures, they may grant the virtual asset license. The license will specify
the scope of permitted activities, any conditions or restrictions, and the duration of the license.