Sunday, August 14, 2022

Crypto industry regulation in the Czech.

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( Even though crypto currencies have been around for a long time, few countries have developed a convenient system for regulating them. There is still debate in society about how to perceive these currencies – as fiat, as electronic money, or as goods. The EU Court of Justice decided to treat it as a payment method. If companies want to have a crypto wallet or exchange to operate legally, they need to obtain a crypto license in Czech Republic. It will take about a month, but you will be able to work and not be afraid of problems with the law.

The Czech Republic and crypto

Today it cannot be said that Czechia managed to develop a well-thought-out set of laws that could regulate the work of such a vast industry. However, specific steps towards this have already been taken.

It is necessary to understand that the crypto industry is not regulated here as a currency; instead, they are perceived as goods. The government does not perceive it as an official payment and therefore is not regulated by the law on payment systems. However, it can be used in transactions.

Understanding regulatory issues is not difficult if you know the legislation that regulates the circulation of goods in the country.

In addition, as a member of the EU, Czechia is subject to EU anti-money laundering regulations, which means it should regulate crypto exchanges that operate in the EU. It is worth noting this country has introduced stricter rules than those provided for by AMLD5, which operates in most European countries.

Here, not only exchanges or wallets fall under state regulation, but also everyone who buys, sells, stores, manages, or acts as an intermediary in the purchase or sale of crypto assets or provides other services related to such investments.

If you conduct activity using cryptocurrencies without a license. In that case, you risk a fine of up to one and a half-million crowns (which is equal to 20 thousand dollars). As you can see, this is quite a lot of money, so most crypto enthusiasts in this country are eager to get permission.

crypto license 2021

Obtaining a crypto license

To perform various activities with crypto assets, a company needs to obtain regular trading permission. Unlike Lithuania or Estonia, there is no separate license for exchanges here, as no special legal regulations have been developed.

A trading license is issued to companies that meet the following requirements:

  • Registration of a legal entity;
  • No criminal record;
  • Open a bank account;
  • Hire a person with experience in the financial sector;
  • There is a developed business plan;
  • Submit a package of papers for licensing to the regulator and pay the fee.

So, the first requirement says that your company has to be registered as a legal entity. It must have a physical office and share capital. It would be best if you also thought about a beautiful name for your company in advance.

Your organization should employ a person whose responsibilities include monitoring financial transactions, compiling reports, and communicating with government agencies. This person must have higher education in this industry, work experience, and an excellent reputation. He/she must have no prior criminal record.

It is also necessary to collect documents that confirm compliance with AML legislation. The company must comply with the policy of protecting customers’ data, counteracting the legalization of proceeds from crime.

Suppose you are a foreign company that wants to enter the European market, and you wish to get a crypto license in Czech Republic. In that case, you need to provide statutory papers in two versions (in the original language and Czech). It is important that the translation is done by an agency that has the right to do so.

If you want to save time and do everything correctly, you can seek help from a specialized company. Some specialists will not only advise you on the list of necessary documents but also check whether you have done everything correctly. In addition, if you cannot come to Prague, you can ask specialists to represent your interests in the regulatory authorities. To do this, you need to draw up a power of attorney.

Thus, even though Czechia has not yet created well-thought-out laws to regulate cryptocurrencies, there are pretty severe restrictions here. To operate legally, you need to get a special permit.

In the end

So, in Czechia, crypto assets are regulated differently from other EU countries. Here they are perceived more like a commodity, and to work, and you need to obtain a trade license. To do this, you need to create an organization that will meet special requirements. If you can’t collect all the documents yourself, you can turn to professionals for help.

Staff Writer; Harry Barker

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