Crypto-friendly payment systems

The fundamental driver of the transformation of the global financial system was the rapid development of digital currency, which ultimately served as a crucial catalyst for new approaches to finance and payments. Given the dynamics of the modern market, the evolution of financial instruments not only expands the ways of protecting one’s own assets, but also introduces new innovative technologies that improve the efficiency of financial transactions.

Every year, cryptocurrencies and blockchain technologies are steadily strengthening their position in the market, gradually rewriting the rules of the game and opening up new ways of doing business and protecting assets. The dynamic development of digital currency only increases the number of companies involved in the crypto business, and, as a result, entails a large-scale challenge for the entire banking and financial system, which are obliged to keep up with the times, offering new financial solutions.

Today, the issue of the possibility of opening an account in payment systems that are trustworthy, have a history of activity in the market and can properly protect the assets of such companies is relevant for crypto business. In this case, it does not matter whether the company’s main activity is crypto exchange or ICO projects.

Pre-check or features that we recommend taking into account

• Jurisdiction of the payment system

First of all, it is important to understand that even in case of rapid development of cryptocurrency and the involvement of business in this area, many jurisdictions still do not fully regulate this issue by law. Thus, it is necessary to carefully select the country of payment system and take into account the country where the license was issued in order to avoid refusal in opening an account.

• Price list for payment system services

Crypto business has always been a high-risk activity, which means that the price for opening an account for such a company will be the maximum possible in such a payment system. It is not uncommon for payment systems to separately insist on payment for compliance services (verification of documents) since often the business model of such companies has a complex structure.

• Simple business model

Payment systems or Banks still prefer to work with simple and understandable business models and companies that already have a history of activity in the market and have proven themselves well throughout their existence. In this case, it is important to present the company’s activities as transparently as possible and show not only supporting documents, but it is also important to have a working active website where the company’s activities will be displayed.

Everything becomes more complicated if the company does not have a processing history or the company is newly created. Close attention will be paid to such a business and not every payment system will be ready to accept its for registration, since there are high risks of money laundering through such a company.

• Advanced compliance

Since there are risks of money laundering through such companies and given that these activities are considered high risks, the payment system will aim to carry out advanced compliance of such a company, which may take months. You will be asked to provide everything – from corporate documents and business licenses to financial wealth confirmation of the company and UBO.

It is important that the company or its owners were not involved in dubious financial schemes and do not have a criminal background, otherwise you should expect a refusal.

Features of opening an account for crypto business

Selecting a country to open an account

Choosing a payment system, it is important to pay attention to the country in which its has a license, namely, the legislation of the country must regulate crypto activities, and the selected payment system must be friendly to crypto business.

The markers of a crypto-friendly payment system are the following:

• The bank services the type of business activity of the crypto company.
• The bank allows to use the account for crypto business.

As an example, if the company’s main activity is crypto exchange, it is important that the payment system agrees to accept B2B and C2B payments into the account while the company makes the exchange for fiat currency.

In this case, we recommend to prepare all necessary documents for carrying out such transactions in order to immediately submit them for consideration by the payment system.

• Carrying out payments in cryptocurrency.
• Possibility to open a multi-currency account and make payments via SWIFT.

Please pay attention to these conditions since in many crypto-friendly payment systems it is possible to work only through SEPA, which will significantly narrow the territory of the company’s operations.

Submitting an application-compliance procedure

This is an important and decisive stage in opening an account.

The payment system will request documents that must confirm good-standing of the company, the legality of doing business in the country of registration, namely a license, identification documents for secretaries, directors, shareholders and ultimate beneficial owners of the company.

It is important to display as simply and correctly as possible the description of the company’s activities and the sources of income of the director and owners.

You may also need a notarized translation with an apostille of all documents, depending on the country of issue.

Since many crypto companies are involved in businesses that require collecting customer data, a compliance department will also pay attention to these circumstances and check how reliable your security system is and how well it complies with international legislation.

In which countries should crypto business open an account?

• The United Kingdom

The UK acts as an oasis for cryptocurrency businesses. This country, ahead of its time, has already established strict standards in its legislation that regulate the cryptocurrency market and obtaining various types of licenses. Crypto activities are regulated by FCA, which has developed special regulations – KYC (Know Your Customer), AML/CTF (Anti-Money Laundering Legislation).

Many payment systems that are registered in the UK are friendly to crypto businesses and offer a wide range of services for such companies.

The current atmosphere of support for crypto business in the UK justifies its status as a hospitable country for financial innovation. The many payment systems registered here offer a wide range of diverse services and development opportunities. For example, an excellent choice for a crypto business would be to register an account with payment systems such as Transferra, Bilderlings and PayDo, which will become not just a solution for the company, but an innovative tool that can improve the financial strategies of a business.

• Lithuania

In the heart of the Baltic coast lies Lithuania, a country open to innovation and financial opportunity. Here, crypto business meets a friendly attitude and a wide range of financial solutions. An additional advantage is that Lithuania is located in the European Union, where appropriate amendments have already been made to the legislation and clear requirements have been developed regarding the regulation of crypto business. Crypto business in Lithuania is regulated by the FCIS, within the framework of the fifth EU Anti-Money Laundering Directive.

In such a favorable environment for creating new financial opportunities, registering an account with payment systems such as PaysWix stands out as an extremely promising solution for the development of crypto business in Lithuania.

• The USA

In its commitment to innovation and financial progressiveness, the United States has initially stood out as a leader in developing a clear regulatory framework to regulate crypto businesses.

The regulation of cryptocurrency in the United States at the legislative level depends on both federal legislation and the legislation of each state. What is constant is that crypto companies fall under FinCEN and SEC control, depending on the type of activity.

Many banks and payment systems in the United States are already demonstrating their readiness to accept and process transfers in cryptocurrency, as well as open accounts for companies in the crypto business. However, the process is greatly simplified if the company is registered directly in the United States.

We invite you to contact our law firm where our lawyers will provide qualified assistance in this strategically significant choice and we will be able to help you to select the most suitable payment solution.

Thus, cryptocurrency is strengthening its position in the market every year and despite some difficulties associated with opening an account for a crypto business, the correct choice of payment system and careful preparation of documents make it possible to effectively resolve the issue of opening an account for a payment system in the shortest possible time.