With help from our team at GBO, you can start trading as a crypto broker in the shortest possible time. Crypto brokerage is a brand new business model that combines a cryptocurrency exchange with standard crypto brokerage services.
For entrepreneurs, it is a way to invest in the booming cryptocurrency market, by providing access for customers to the new types of financial markets. A crypto brokerage expands these opportunities by allowing you to operate not just as a cryptocurrency exchange or trader alone.
How does GBO help you get a crypto broker license?
We have helped many investors to set up crypto broker turnkey operations by providing a full-service package of services. This includes all the individual elements that are required to launch a new crypto broker platform, including:
- Choice of jurisdiction
- Establishment of a corporate entity
- Choosing suitable software packages for a trading platform (White Label platforms)
- Registration of a crypto exchange
- Licensing the cryptocurrency exchange
- Establishing a trading room
- Recruiting and hiring trained personnel
We will help you obtain a crypto broker license
What services does a crypto broker license allow you to do?
Crypto broker licenses permit brokers to provide services that match the services provided by classic share and stock brokers. A crypto broker license allows you to provide your clients with margin trading, advice, market analysis and all the other services that a share broker provides in equities investment.
White label platforms provide a user-friendly interface; when you use them, you join a community of traders and software developers.
What are the differences between a crypto broker license and an exchange license?
A licensed broker works as an intermediary for its customers who are buying and selling in cryptocurrencies. A customer places a buy or sell order, at a specific price and for a specific quantity of a designated cryptocurrency. The broker tries to match these orders with others in the market to facilitate a trade. For example, a customer wanting to invest in bitcoins can instruct the broker to buy five bitcoins and will nominate the price they are prepared to pay. The crypto broker then makes an order to buy on their preferred exchange.
A crypto exchange provides an online market for buyers and sellers to trade cryptocurrencies. Deals are negotiated by matching buy and sell orders. In the example we gave above, the crypto broker places an order to buy bitcoin, and can stipulate the quantity and the price they are willing to pay. Suppose the crypto exchange platform can match this with a selling order. In that case, the transaction is closed, the bitcoin is transferred to the new buyer, and funds are transferred from the buyer to the seller.
Crypto brokers and exchanges can charge fees for each trade based either on volume or value. A licensed crypto broker can offer its clients margin trading services in multiple markets such as Forex and cryptocurrencies.
One of the main facilities allowed by a crypto broker license is that customer accounts can be denominated in both fiat and cryptocurrencies. Customers can choose to establish either long or short positions on crypto assets.
A valid crypto broker license allows a company to offer its services in the ways described above.
Trading cryptocurrencies through a licensed crypto broker
Cryptocurrency trading is a way for investors to speculate on future price movements. For many new and part-time investors, the workings of the crypto markets are too complicated for them to work directly with crypto exchanges, so they rely on the professional services of licensed crypto brokerages. In the same way, investors in equities may not be fully experienced in the workings of the stock market, so they use stockbrokers to handle their trading.
Investors can trade cryptocurrencies using a licensed crypto broker or directly on a licensed crypto exchange. For users who are just starting to buy and sell bitcoin and other cryptocurrencies, the services of a crypto broker can act as a financial intermediary as well as an advisor in online financial assistance when they want to trade in cryptocurrencies.
What services does a licensed crypto broker provide?
Crypto brokers offer most of the facilities for users trading in cryptocurrency markets to exchange fiat currencies for cryptocurrencies, or to buy and sell cryptocurrencies. The broker provides the platform between the buyer and seller and concludes the trades.
For individual customers, using a crypto broker yields several advantages for users, especially when they are trading small values of cryptocurrencies.
Brokers can also hold their customers’ cryptos in a preferred wallet, to promote security and trust, and to make the administration of trades more automated.
What is a cryptocurrency exchange?
A crypto exchange is a platform where buyers and sellers trade cryptocurrencies and fiat currencies directly, based on market prices. The trading takes place now between buyers and sellers. The exchange provides the platform and charges a fee for services provided.
Exchanges are suitable for professional cryptocurrency traders who speculate in large volumes more frequently, taking advantage of small price fluctuations throughout the trading cycle.
Crypto exchanges do not provide active support for traders. Beginners and inexperienced investors could find the platforms highly confusing and even dangerous to the value of their funds. This is the main advantage offered by crypto brokers. The service provided is more targeted and friendly to non-speculative trading and so is better suited to non-professional investors.
What license regulations and compliance laws apply to crypto brokers?
The crypto broker license requirements vary in different countries. In most countries, a crypto license will only be issued to a locally domiciled company that is fully compliant with the provisions of anti-money-laundering (AML), Know Your Customer (KYC) and Countering the Financing of Terrorism (CFT) laws. The same regulations apply, whether it is a crypto broker license or exchange. An example of any crypto brokerage set up in the EU is in directives AML5 and AML6.
The process of setting up a licensed crypto brokerage can be complex. It would be best if you talked to our friendly experts here at GBO, where we have the knowledge and experience in all the steps you need to take.
What are the primary operations in a licensed crypto brokerage business?
A crypto brokerage must comply with all the relevant regulations, and offer its customers safe and efficient trading facilities. This necessitates several departments and components it needs to have before getting started.
- Crypto brokerage license maintenance and renewal
- AML/KYC/CFT compliance
- Connections to payment service providers
- Bank accounts
- Advertising, Public relations and Marketing
- Platform software management
- Customer account management
- Dealing desk & order book
- Finance management, funds transfers (deposits and withdrawals)
- Wallets management
- Information technology (trading platform, CRM, data centers).
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