Registration of cryptocurrency exchange in Belarus

What is necessary to be guided when opening a cryptocurrency exchange in Belarus?

Decree of the President of the Republic of Belarus No. 8 of December 21.12.2017, XNUMX “On the Development of the Digital Economy” (hereinafter referred to as the Decree) was the first in the CIS to open the way for the legal development of a business based on the circulation of tokens, including cryptocurrencies. Thus, the registration of a cryptocurrency exchange and holding an ICO in accordance with the law of the Republic of Belarus is becoming a hot topic. Registration of a cryptocurrency exchange (an operator of a cryptoplatform in terms of the Decree) is primarily associated with such a process as acquiring the status of a resident of the High Technology Park of the Republic of Belarus.

A cryptoplatform operator is a resident of the High Technology Park (HTP), which, using the information system, provides individuals and (or) legal entities, including non-residents of the Republic of Belarus, with the opportunity to make the following transactions (operations) between themselves and (or) with the cryptoplatform operator: alienation, purchase of digital signs (tokens) for Belarusian rubles, foreign currency, electronic money; exchange of digital signs (tokens) of one type for digital signs (tokens) of another type; other transactions (operations) in accordance with the requirements of the Decree.

Also, an important document that defines the rules for the operation of the cryptoplatform operator is the Rules for the implementation of the activities of the operator of the cryptoplatform, approved by the decision of the Supervisory Board of the High Technology Park of the Republic of Belarus (hereinafter referred to as the Rules). These Rules can be found on the HTP website. This document, consisting of 10 pages, regulates, in addition to general provisions, the rules for establishing relationships with clients, requirements for advertising and informing clients, and the procedure for making transactions with tokens. It also establishes a list of information that is subject to disclosure on the exchange's website on the Internet.

The aforementioned Rules were published only on November 30, 2018, that is, much later than the Decree came into force. This state of affairs drew criticism from the crypto community. At the same time, unlike many jurisdictions, the regulation of crypto-exchanges in Belarus is not “raw” and does not rely on the principle “everything that is not prohibited by law is allowed”, which could have worked perfectly in the days of Ancient Rome, but unfortunately causes law enforcement problems our days. It is because of the "gray", semi-legal position of crypto exchanges in many jurisdictions that their main problem arose today: it has become almost impossible to open a bank account for a crypto exchange.

What you need to pay attention in the first place?

We will not retell the provisions of the Rules to persons interested in registering a cryptocurrency exchange. If you wish, you can familiarize yourself with these rules yourself to any person. We will dwell on the most important points that can help make a decision on whether to create a crypto exchange in Belarus or if our jurisdiction is not suitable for you at all.

1. Only a company established in the Republic of Belarus can become a crypto-exchange.

Registration of a cryptocurrency exchange is available only for residents of Belarus who have joined the HTP. Thus, first of all, it is necessary to establish a legal entity in accordance with the law of the Republic of Belarus. This can be done by both legal entities and individuals who are residents of any jurisdiction, including foreign ones. A crypto startup can be registered by persons with experience in the IT field.

The legal form may be any within the framework of commercial organizations used in Belarusian corporate law. First of all, this is a limited liability company (LTD) and a closed joint stock company (CJSC).

Registration of a firm (legal entity) should not be confused with the establishment of a representative office of a foreign commercial organization. According to Belarusian law, a representative office is not and in general cannot be engaged in entrepreneurial activity, therefore this form is not suitable for opening a crypto exchange.

If you plan to appoint a director to a person who is not a resident of one of the EAEU countries, the problem of obtaining a work permit for Belarus for a director also becomes relevant, which takes about one month. After all, the exemption regarding the absence of the need to obtain a special work permit in Belarus applies only to existing HTP residents and does not apply to applicants for this status.

2. Servers should be in Belarus?

You should not count on obtaining HTP resident status by setting up a company in Belarus with a nominee director and a nominal legal address. Having received the status of HTP resident, the main activity of the company should be concentrated in Belarus. There are a lot of people who want to get HTP resident status, because candidates with unclear intentions have a low chance of being accepted.

If we talk about the physical location of the servers where the crypto-exchange will be located, it must be said that physically they may not be located in Belarus. So, Amazon’s cloud storage can be used.

3. It is necessary to develop a business project.

The key document considered when joining the HTP is a business project. One should not naively believe that this document can be written in one evening "on the knee" and it will be accepted. This option is possible only if you have an economic education and extensive experience in the IT field. Otherwise, there is a possibility that joining the HTP could be delayed.

4. Issue price from 2 000 000 Belarusian rubles.

To acquire the status of a crypto platform operator, i.e. to register a crypto exchange, it is required to form the authorized capital of a commercial organization (crypto platform operator) in the amount of at least 2 000 000 (Two million) Belarusian rubles.

It is necessary to form the statutory fund before joining the HTP, formation can also take place in convertible foreign currency at the rate set by the National Bank of the Republic of Belarus on the day of payment. As of the end of 2019, considering the amount is about 950 US dollars, 000 Euros, 850 Yuan.
Half of the authorized capital, formed in the minimum amount, can be kept in business circulation, spending on the organizational needs of the company: from ordering consulting services to rent.

The rest of the funds will need to be directed to the formation of a guarantee deposit, which must be constantly on the account. This security deposit cannot be used without urgent need, it serves as a guarantee of compensation of funds to crypto-exchange clients in case of emergency.

5. Applicants must take an active position.

If you are going to use a nominee director to join the HTP, then you had better refuse this idea. Even if you order support for joining the HTP on a turnkey basis, you will not be able to do everything at the HTP by power of attorney. The presence of the director will be necessary, and if he is not aware of the planned activities of the company, joining the HTP may not be successful, no matter what ideal business project is presented.

The activity of the crypto platform operator is fraught with high risk, therefore, it is worth counting on the close attention from the administration of the OEM to the leaders and founders of the applicant company.

6. The opening date of the cryptocurrency exchange in Belarus.

The term for registering a cryptocurrency exchange depends on many factors, including the activity of the applicant's position and the speed of making managerial decisions on personnel, the development of local acts. The easiest way to speed up joining the Hi-Tech Park would be to confirm by the beneficial owner of the crypto-exchange that there are at least 5 US dollars in bank accounts. In this case, the “Big Four” audit may be postponed and the start of the cryptocurrency exchange may take no more than two to three months.

It is also important that the applicant has a software platform for a crypto exchange. If at the time of the start of work on obtaining a "license" the applicant already has the necessary software products, then this circumstance will have a very positive effect on the speed of entry.

7. Opening a bank account and making payments.

Potential investors studying the possibility of opening a cryptocurrency exchange in Belarus are often worried about the possibility of opening bank accounts for settlements. It should be said here that at least five banks in Belarus have opened accounts for crypto exchanges adopted by the High Technology Park. The procedure for servicing crypto exchanges in Belarusian banks is carried out on standard terms, although if we talk about acquiring, many nuances should be agreed on individually. Also, the crypto-exchange as a resident of the HTP has the right to open accounts in foreign banks.

Registration of a cryptocurrency exchange in Belarus: results.

Those who are skeptical about the possibility of registering a cryptocurrency exchange in Belarus should think about the following. In less than a year (since November 2018), two crypto exchanges were created in Belarus: Currency Com Bel LLC and Cryptotrade LLC (iEx). If we take into account the fact that for most of this period there was a distinct bearish trend in the cryptocurrency market, then such a result of the development of Belarusian crypto exchanges can be considered optimistic. In connection with the change in the trend, we can expect the arrival of new and new crypto-startups in Belarus.

If you are interested in registering a cryptocurrency exchange in Belarus, it will also be very useful to familiarize yourself with our publication "The procedure for joining (registration) in the HTP of the Republic of Belarus".