We believe the next big crypto entrepreneur will create the most trusted, liquid, secured, and technically advanced crypto exchange to meet the need of this market
Starting a business is a complex and difficult process. However, once you have a successful venture - the pride, joy, and sense of accomplishment is like nothing else. Creating your crypto exchange is both exciting and challenging given the nature of cryptocurrencies and the hesitation around its mass acceptance and changing regulations. The uncertainty creates tremendous opportunities for entrepreneurs who are ready, willing, and able to put in the work.
The primary task in building an exchange is to identify and select your jurisdiction of operation. The country and regulations of your business of operations not only affects your cost of doing business but also provides prestige and legal framework for you, customers, and other stakeholders. For example, if you want to target US customers, you need a state-by-state money transmitter or money service business license in each state. Apply and negotiate for a proper business license in the jurisdiction from which you will operate.
Sophisticated regulated jurisdictions offer safety and stature for market participants, however, they are expensive to operate. If you have the budget and time then the Cayman Islands and Switzerland are the well-regulated jurisdictions to run a fully compliant cryptocurrency exchange requiring exchanges to adhere to comprehensive AML/KYC systems. Other favorable offshore jurisdictions include: the Bahamas, Belize, Belarus, Malta, Gibraltar, Mexico, Liechtenstein, Estonia, Lithuania, and Luxembourg.
The other important thing to consider for selecting your jurisdiction is business friendly banking laws and statutes that support currency exchange and flow of funds.
To get the most value from a bank, you need to investigate the services different banks offer in your selected jurisdiction – bank fees, bill payment, credit card processing, merchant services, mobile/online services, 24/7 customer support, fraud detection, and other corporate services. After selecting a bank for your crypto exchange business, make an effort to build an ongoing relationship with a banker who understands your business and can forecast the types of banking services you’ll need moving forward.
It would be best if you did proper due diligence to find a bank which has favorable policies to enable you to open a correspondent account to receive client funds and convert FIAT to and from crypto.