Payment Institution for Bitcoin Exchange
The first EU country to license a bitcoin exchange was Luxembourg. Thus, Bitstamp Europe, a platform allowing its clients to exchange Bitcoins, EUR and USD, was authorized in April 2016 as payment institution. The rationale behind is the following: the issue of virtual currencies as such is not subject to authorization, but the service provided by the intermediary (i.e. receiving funds from the buyer of Bitcoin in order to transfer them afterwards to the seller) is covered by the authorization as payment institution (under the payment service directive).
The costs for the authorization process as payment institution in Luxemburg will in general range between 50,000 and 60,000 EUR; office expenses and VAT, if any, to be added. We may stress that our banking and finance department in Luxembourg has longstanding experience in this field and we remain at the disposal of clients who wish to incorporate EU licensed Payment Institution for Bitcoin Exchange.
It should be noted that the application file for the authorization as a Luxembourg payment institution requires, among others:
1. In relation to its shareholders: professional standing, full identification (including of the ultimate beneficial owners), information regarding the financial position and soundness of the direct and indirect shareholders;
2. Central administration and infrastructure (substance requirements): renting of offices, hiring of local staff, appointment of local directors, controlled outsourcing.
As a regulated entity, the Luxembourg based payment institution will need to create sound financial resources.
In addition to legal services in Luxembourg we can offer the similar services in Poland which is also full EU member state from 2004. The expenses to incorporate (and later to maintain) Payment Institution for Bitcoin Exchange in Poland are many times cheaper than in Luxembourg.
If you have any question regarding above-mentioned material or wish to use our legal assistance in this delicate matter, please, contact us today.