How to Obtain a Licence for Processing Cryptocurrency Transactions in the UK: A Guide by Sterling Law
As cryptocurrency continues to transform the financial sector, many payment institutions in the UK are looking to integrate crypto transactions into their services. This guide answers the key questions about licensing requirements, the application process, and the differences between the UK and Ireland. Sterling Law, a Legal 500 company, is here to help you navigate the complexities and ensure compliance every step of the way.
Do I Need A Licence to Process Crypto Transactions in the UK?
Yes, if you want to process cryptocurrency transactions in the UK, you need a separate licence in addition to an Electronic Money Institution (EMI) licence. Specifically, you must register as a Crypto-Asset Firm with the Financial Conduct Authority (FCA).
Where Can I Obtain the Cryptocurrency Licence?
You can obtain the necessary licence from the Financial Conduct Authority (FCA). The FCA regulates firms involved in crypto-asset activities to ensure compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) measures.
What Do I Need to Do to Get a Licence?
Steps to Obtain a Crypto License:
- Register as a Crypto-Asset Firm with the FCA: This involves demonstrating that your business meets the FCA’s stringent AML/CTF requirements.
- Prepare Detailed Documentation: This includes a comprehensive business plan, details of internal controls, risk management frameworks, and customer due diligence procedures.
- Implement Robust AML/CTF Measures: Ensure your firm has strong policies to detect and prevent money laundering and terrorist financing.
- Submit an Application: Provide all necessary documentation and pay the applicable fees.
Required Documentation:
- Business Plan: Detailed outline of your business activities and financial projections.
- AML/CTF Policies: Comprehensive measures to combat money laundering and terrorist financing.
- Internal Controls: Procedures to ensure regulatory compliance and operational efficiency.
- Key Personnel Information: Background checks and qualifications of directors and senior management.
What’s the Application Process, How Much Does It Cost, and How Long Does It Take?
Application Process:
- Initial Preparation: Gather necessary documentation, including a business plan, AML/CTF policies, and details of key personnel.
- Submit Application: Apply through the FCA’s online portal, including all required information and documents.
- FCA Review: The FCA reviews your application and may request additional information.
- Decision: Once satisfied, the FCA will grant registration.
Application Fee: The fee ranges from £2,000 to £10,000, depending on the scale of your crypto-asset activities.
Processing Time: Typically, the application process takes between 3 to 6 months, depending on the completeness of the application and the FCA’s requests for additional information.
Comparison Between the UK and Ireland
| UK | Ireland | |
|---|---|---|
| Regulatory Authorities | Financial Conduct Authority (FCA) | Central Bank of Ireland (CBI) |
| Licence Requirements | Separate registration as a Crypto-Asset Firm with the FCA, alongside an EMI licence. | Firms must register as a Virtual Asset Service Provider (VASP) with the CBI, in addition to holding an EMI licence. |
| Market Access | Primarily the UK market, with a significant fintech ecosystem. | EU-wide market access through passporting rights. |
| Costs and Processing Time | Application fee ranges from £2,000 to £10,000, with a processing time of 3-6 months. | Application fee ranges from €1,000 to €5,000, with a processing time of 4-6 months. |
| Regulatory Environment | The FCA is known for its rigorous regulatory environment and support for fintech innovation. | The CBI provides a stable regulatory framework and strategic access to the EU market. |
How Sterling Law Can Help?
At Sterling Law, we specialise in assisting payment institutions with obtaining the necessary licences to process cryptocurrency transactions. Our services include:
- Application Preparation and Submission: We help you compile and submit comprehensive applications that meet all FCA requirements.
- Compliance Support: Ongoing support to ensure your business stays compliant with all AML/CTF regulations.
- Business Planning: Assistance in developing detailed business plans and internal control frameworks.
- Regulatory Liaison: Acting as your representative in communications with regulatory bodies such as the FCA and CBI.
- Crypto-Asset Firm/VASP Registration: Navigating the additional requirements for handling cryptocurrency transactions.
For expert guidance and support in obtaining your crypto-asset licence, contact Sterling Law, your trusted partner in legal compliance and regulatory affairs!
