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Study 2: Licensing frameworks for digital asset service providers

Licensing & Registration

A. Preamble

This benchmarking module focuses on licensing and registration regimes adopted by jurisdictions that operate under a bespoke digital asset regulatory regime. For the purpose of the benchmarking, provisions and requirements have been grouped into four areas.
Section C. Country Drill-Down provides insights into the specific provisions at the jurisdictional level by providing a summary of the detailed requirements as outlined in the available legislation and guidance. It is important to note that this presents a summary and not an exhaustive view of all requirements. The regulatory documents must be consulted for full details.
Interactive filters are available to tailor the information according to individual preferences. The left hand column under Section 3. Country Drill-Down further provides direct access to the individual country fact sheets for contextual information including the links to the source documents for details on specific requirements.

B. Country Benchmarking - Synopsis

Not applicable for this module given the nature of regulatory provisions covered.

C. Country Drill-Down


Select country:
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Assessment dimension:
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Country-specific contextual info incl. source documents
Assessment dimension
Details
1. License categories
2 licence classes (see country fact sheet for details)
Authority has discretion to determine applicable license category
2. Application process
Applications are to be made directly to the Authority
Key supporting documentation must include:
A business plan setting out the nature and scale of the digital asset business
Details for the management of the business and supporting policies and procedures including in relation to AML/CFT
3. Key licensing/registration criteria
There are no strict criteria defined - aspects considered include but are not limited to the following:
The robustness of the business model and supporting documentation provided
Fitness and property of the applicant, which applies to any director, manager or officer
The applicant’s previous experience in operating a digital asset business
The applicant’s discipline history
Other matters as relevant
No minimum capital requirements are prescribed
License holders must maintain a principal office in Antigua and Barbuda
A compliance officer must be appointed at the principal office subject to certain minimum requirements
4. Other key provisions
The Authority has the power to impose pre- and/or post-licensing conditions and/or restrictions
1. License categories
4 license categories (see
country fact sheet
⁠
for details)
Authority has discretion to determine the applicable license category
2. Application process and key supporting document
Applications must be made through a virtual financial asset agent that is registered with the Authority
All communications and engagements with the Authority must be routed via the agent
Key supporting documents and information required for submission include:
Business plan
Details of the organizational structure
Programme of operations setting out the systems, security access protocols
Fitness and properness assessment
Details on operational capacity and requirements
The business plan must cover the following
General details on the business
Governance arrangements
Details on the risk function and compliance function including policies and procedures
Approach for safeguarding client assets
Prudential requirements
Conduct of business
Record keeping ,reporting and disclosure
Procedure for reporting breaches
Other organizational details as required
3. Key licensing/registration criteria
Holistic assessment of the license application with key evaluation dimensions including:
The robustness of the business operating model and supporting documentation provided
The fitness and property of applicants
Compliance with minimum initial criteria in the range of EUR 50,000-730,000 depending on the license category
Compliance with the minimum requirement of having two individuals nominated for directing and managing the virtual financial asset service provider business
Fitness and property is assessed based on the applicant’s integrity, competence and solvency and applies at a minimum to:
Persons with a qualifying holding in the applicant
Beneficial owners
Members of the applicant’s board of administration
Senior managers
Money laundering risk officer and compliance officer
The assessment includes mandatory interviews between the Authority and the proposed money laundering risk officer and compliance officer
Other decision-making criteria to be taken into account include:
The protection of investors and the general public
The protection of the reputation of Malta
The promotion of innovation, competition and choice
The reputation and suitability of the applicant and all other parties connected with the applicant
4. Other key provisions
The Authority has the power to impose pre- and/or post licensing conditions
1. License categories
1 licence category (”utility token exchange licence”)
2. Application process
Information not available
3. Key licensing/registration criteria
Assessment of the application considers the following criteria
If granting the decision is in the public interest
Adequacy of the business plan
Adequacy of the proposed systems and operating procedures
Adequacy of the proposed rules and
Adequacy of the applicant’s arrangements for ensuring safety and security of utility tokens, ability to comply with AML/CFT requirements, ensuring safe and timely performance of transactions effected on the utility token exchange, conducting market surveillance with regard to transactions on the exchange
Adequacy of the complaints management process
4. Other key provisions
No other specific provisions
1. License categories
Not applicable as digital asset business are subject to registration and thus are not considered licence holders
As part of the registration, the applicant needs to however specify the category of digital asset business
2. Application process
Applicants must provide extensive information and documentation as part of the application process including the following:
Detailed business plan including financial and operational projections
A summary of the written supervisory, internal controls and risk management policies and procedures, including digital token management, cybersecurity operations, operational controls, AML/CFT policies and controls, reporting policies, code of conduct complete with a copy of the policy and procedures
Details on staffing requirements, and technological requirements
Financial statements
Evidence of good standing
Certain additional information apply for the registration as a digital token exchange
3. Key licensing/registration criteria
While the regulatory framework does not specify exact criteria, elements that are taken into consideration include whether the digital asset business has:
The appropriate and sufficient systems and controls to perform its functions and manage its risks
The ability to meet solvency standards and levels of capital; and 
Fitness and property of key position holders taking into account the financial status / solvency of the person, education, qualification and experience, the ability to carry on the regulated activity competently, honestly and fairly, reputation and character, the ability of the person to ensure a satisfactory standard of governance organization and operational conduct
The adequacy of the digital asset framework / operating model and the associated processes and procedures  
4. Other key provisions
The Authority has the power to impose pre- and/or post-licensing conditions and/or restrictions
1. License categories
3 license categories (see country fact sheet for details)
Authority has discretion to determine the applicable license category
2. Application process
Applications are made directly to the Authority electronically via email
Applicants must provide an extensive set of information including a detailed business plan as well as extensive information regarding the operating model and its implementation via policies and procedures
The full details on the required information and supporting documents can be reviewed
here
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3. Key licensing/registration criteria
Applicants are reviewed in accordance with a set of criteria/principles consistent with other licensing regimes implemented by the Authority
Key criteria include:
Controllers and officers to be fit and proper persons
Business to be conducted in prudent manner
Business to be carried out with Integrity and skill
Appropriate corporate governance policies and processes in place
No obstruction of effective consolidated supervision
4. Other key provisions
The Authority has the power to impose pre- and/or post-licensing conditions and/or restrictions
1. License categories
Virtual asset service providers are subject to a registration requirement and as such are not considered licence holders
2. Application process
Applications are to be made directly to the Commission
Key supporting documentation must include the following:
Details on the key position holders as well as shareholders, appointed auditor and the proposed representative
Business plan
The business plan must cover among other things the following items:
Knowledge, expertise and experience of the person applying for registration
Detailed information on the nature, size, scope and complexity of the virtual asset service provider
Details on the underlying technology
Information on the virtual asset service provider’s marketing approach and the expected source of business
Details on planned outsourcing arrangements
Information on the anticipated human resource capacity at commencement of business and in the long term
An indication of the initial capital and financial projections of covering the first three years of operation, including projected set-up cost
Physical address in the Virgin Islands
A written risk assessment outlining the key risks associated with the business and their management
Written policies and procedures to evidence compliance with on-going obligations including in relation to AML/CFT
Details on internal safeguards and data protection measures
Approach for handling client assets and custodian relationships
Approach for complaints management
3. Key licensing/registration criteria
Key criteria to be taken into account in the assessment of the application include inter alia:
Ability to the applicant to comply with requirements under the Act
Fitness and property of the applicant including its directors, senior officers, shareholders and beneficial owners
The organisation, management and financial resources
The applicant’s ability to manage the identified risks
Registration of the virtual asset service provider is not against the public interest
The virtual asset service provider must have at least two officers one of which must be physically resident in the Virgin Islands
The virtual asset service provider must have an authorized representative approved by the Commission
4. Other key provisions
Authority has the power to impose pre- and/or post licensing conditions
1. License categories
Not applicable
Virtual asset businesses are subject to a registration requirement and awarded a certificate of registration
2. Application process
Applications for registration are made directly to the Authority
Key supporting information and documentation must include:
Details on the nature and scope of the virtual asset business
Details on key position holders including directors, beneficial owners and significant shareholders
Details on the (nominated) principal representative (if applicable)
Written policies, rules and procedures in relation to AML/CFT, data management and protection, security access control and cyber security safeguards
A risk assessment of the products and services to be provided
3. Key licensing/registration criteria
Registration applicants are subject to a fit and proper assessment, taking into account solvency, education and professional qualifications and experience, reputation and financial integrity, and any evidence of improper conduct
The fit and proper assessment extends to any officers, executives, principal representatives, beneficial owners, significant shareholders, directors
Registrants with a registered office outside of Dominica, must appoint a principal representative who is resident in Dominica
No specific initial financial requirements prescribed
4. Other key provisions
The Authority has the power to impose pre- and/or post licensing conditions
1. License categories
Not applicable
Virtual asset businesses are subject to a registration requirement and awarded a certificate of registration
2. Application process
Applications for registration are made directly to the Authority
Key supporting information and documentation must include:
Details on the nature and scope of the virtual asset business
Details on key position holders including directors, beneficial owners and significant shareholders
Details on the (nominated) principal representative (if applicable)
Written policies, rules and procedures in relation to AML/CFT, data management and protection, security access control and cyber security safeguards
A risk assessment of the products and services to be provided
3. Key licensing/registration criteria
Registration applicants are subject to a fit and proper assessment, taking into account solvency, education and professional qualifications and experience, reputation and financial integrity, and any evidence of improper conduct
The fit and proper assessment extends to any officers, executives, principal representatives, beneficial owners, significant shareholders, directors
Registrants with a registered office outside of Grenada, must appoint a principal representative who is resident in Grenada
No specific initial financial requirements prescribed
4. Other key provisions
The Authority has the power to impose pre- and/or post licensing conditions
1. License categories
Not applicable
Virtual asset businesses are subject to a registration requirement and awarded a certificate of registration
2. Application process
Applications for registration are made directly to the Authority
Key supporting information and documentation must include:
Details on the nature and scope of the virtual asset business
Details on key position holders including directors, beneficial owners and significant shareholders
Details on the (nominated) principal representative (if applicable)
Written policies, rules and procedures in relation to AML/CFT, data management and protection, security access control and cyber security safeguards
A risk assessment of the products and services to be provided
3. Key licensing/registration criteria
Registration applicants are subject to a fit and proper assessment, taking into account solvency, education and professional qualifications and experience, reputation and financial integrity, and any evidence of improper conduct
The fit and proper assessment extends to any officers, executives, principal representatives, beneficial owners, significant shareholders, directors
Registrants with a registered office outside of St. Kitts & Nevis, must appoint a principal representative who is resident in St. Kitts & Nevis
No specific initial financial requirements prescribed
4. Other key provisions
The Authority has the power to impose pre- and/or post licensing conditions
1. License categories
Not applicable
Virtual asset businesses are subject to a registration requirement and awarded a certificate of registration
2. Application process
Applications for registration are made directly to the Authority
Key supporting information and documentation must include:
Details on the nature and scope of the virtual asset business
Details on key position holders including directors, beneficial owners and significant shareholders
Details on the (nominated) principal representative (if applicable)
Written policies, rules and procedures in relation to AML/CFT, data management and protection, security access control and cyber security safeguards
A risk assessment of the products and services to be provided
3. Key licensing/registration criteria
Registration applicants are subject to a fit and proper assessment, taking into account solvency, education and professional qualifications and experience, reputation and financial integrity, and any evidence of improper conduct
The fit and proper assessment extends to any officers, executives, principal representatives, beneficial owners, significant shareholders, directors
Registrants with a registered office outside of St. Vincent & the Grenadines, must appoint a principal representative who is resident in St. Vincent & the Grenadines
No specific initial financial requirements prescribed
4. Other key provisions
The Authority has the power to impose pre- and/or post licensing conditions
1. License categories
1 general licence class (”virtual asset service provider license”)
2. Application process
As part of the application process, applicants must inter alia submit various information including a detailed business plan with financial and operational projections, applicable policies and procedures , evidence of minimum financial requirements and evidence of the human and technology resources required for operating the business
3. Key licensing/registration criteria
While the regulatory framework does not specify exact criteria, elements that are taken into consideration include
Fitness and properness of the applicant including its officers and beneficial owners, taking into account the person’s financial status, education and experience, and competence, reputation, honesty and integrity, the ability to perform the relevant functions properly, discipline history
Adequacy of resources, infrastructure, staff to carry out the business activities
The nature of the virtual asset business activities proposed to be carried out by
Any information obtained from a competent authority or comparable body
Whether the granting of a licence to the applicant may pose a risk to purchasers, investors or the public
Controllers, manager, principal officer and directors responsible for the day-to-day management of the company must be residents in Botswana
4. Other key provisions
(2) A licence issued under this regulation may contain such conditions as the Regulatory Authority may determine.
1. License categories
5 licence categories (see country fact sheet for details)
Commission has discretion to determine the applicable license category
2. Application process
Applications are to be made directly to the Authority
Key supporting documentation must include:
A business plan setting out the nature and scale of the digital asset business
Details for the management of the business activities
AML/CFT policies and procedures
Particulars and information relating to customer due diligence of promoters, beneficial owners, controllers and directors
3. Key licensing/registration criteria
Assessment of the licence application will take into account:
The adequacy of the applicant’s resources, infrastructure and staff competence, experience, and proficiency to carry out a virtual asset service provider business
The fitness and property of the applicant including its controllers, beneficial owners, their associates and officers
The fitness and property assessment takes into account criteria such as the financial standing, education, qualification and experience, reputation, character and financial integrity, discipline history
The applicant’s ability to comply with the provisions under the Act
Virtual asset service providers must have a physical office in Mauritius
Certain Minimum capital requirements must be met
4. Other key provisions
The Commission has the power to impose pre- and/or post licensing conditions
1. License categories
Four license categories (see
country fact sheet
⁠
for details)
2. Application process
Applications must be made directly to the Central Bank
Licence applicant has right to appoint a representative to assist in the process, e.g. a law firm or consultancy firm
3. Key licensing/registration criteria
Licence applicants are assessed vis-a-vis eight defined conditions:
Compliance with the requirements for the legal status of the business
Persons in controlled functions must have a designated place of business within the Kingdom of Bahrain
Suitability of substantial shareholders
Level of skills and experience of persons in controlled functions
Compliance with minimum financial / capital requirements
Adequacy of systems and controls under consideration of the risks involved in the business
Requirement to appoint an external auditor (subject to the Central Bank’s approval)
Other requirements in relation to books and records, general conduct and other aspects as required by the Central Bank
4. Other key provisions
Authority has the power to impose pre- and/or post licensing conditions and/or restrictions
Applicants that have received written approval from the Central Bank must undergo a readiness assessment by an independent third party prior to commencing operations and submit a readiness assessment report
Scope of the readiness assessment includes the licensee’s:
Risk management system
Capital adequacy
Organizational structure
Operational manuals, policies and procedures, internal controls and systems
Information technology and information system security
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