REGISTRATION OF A CRYPTO EXCHANGER IN THE
CZECH REPUBLIC VS REGISTRATION OF A CRYPTOCURRENCY EXCHANGE IN THE CZECH
REPUBLIC

If you are just starting your own crypto activities,
you should start with registering a crypto exchanger in the Czech Republic as a
more simple form of conducting a cryptocurrency business. After obtaining the
necessary experience and accumulation of assets, you can proceed to the
registration of a cryptocurrency exchange in the Czech Republic.

WHAT IS
NEEDED FOR REGISTERING A CRYPTO EXCHANGER AND REGISTERING A CRYPTOCURRENCY
EXCHANGE IN THE CZECH REPUBLIC?

First of all, to register a crypto-exchange and cryptocurrency
exchange in the Czech Republic, it is necessary to select and verify the name
of the future Czech crypto-company. Then, the future owner of the
crypto-exchanger/cryptocurrency exchange in the Czech Republic needs to collect
a package of personal documents, including a certificate of a criminal record.
To register a crypto exchanger/cryptocurrency exchange in the Czech Republic,
it is imperative to obtain the legal address of this crypto company for a
period of one year. At the final stages of registering a crypto exchanger/
cryptocurrency exchange in the Czech Republic, it is necessary to assemble a
package of statutory documents of the company in the Czech Republic, pay state
fees for registering a crypto exchanger/ cryptocurrency exchange in the Czech
Republic and submit documents to the appropriate Czech authorities.

THE
POSITION OF THE GOVERNMENT OF THE CZECH REPUBLIC REGARDING CRYPTOCURRENCY
ACTIVITIES, THE ACTIVITY OF CRYPTOCURRENCY EXCHANGE AND CRYPTOEXCHANGERS ON THE
TERRITORY OF THE CZECH REPUBLIC

Bitcoin and other cryptocurrencies do not have a clear
legislative definition and regulation in the legislation of the Czech Republic.
The Czech government interprets cryptocurrency as a product/thing, value,
expressed in digital form. Obtaining a special license for the implementation
of the activity of crypto-exchange and cryptocurrency exchange in the Czech
Republic is not required. However, to secure successful international
cryptocurrency activities, you can obtain an EMI license.

There are also no special rules for taxation of the
activity of crypto-exchangers and cryptocurrency exchange in the Czech
Republic. You also need to consider that the paying with cryptocurrency
involves the payment of VAT. Evasion of which entails the corresponding
consequences up to the point where the buyer-legal entity is responsible for
nonpayment of VAT by the supplier, in case of paying with cryptocurrency.

THE
POSITION OF THE NATIONAL BANK OF THE CZECH REPUBLIC REGARDING THE
INTERPRETATION AND REGULATION OF CRYPTOCURRENCY AND CRYPTOCURRENCY ACTIVITIES

The National Bank of the Czech Republic (hereinafter
referred to as the CNB) does not consider Bitcoin to be non-cash or electronic
money. Cryptocurrency, according to the official opinion of the CNB, also cannot
be considered as an investment tool, and the exchange of fiat money for Bitcoin
as a currency exchange. Regarding to this, the CNB does not extend the scope of
its regulation to cryptocurrency activities (cryptocurrency exchange, crypto
exchangers, conducting ICOs, etc.). The position of the bank due to the fact
that Bitcoin and other cryptocurrencies do not have a relatively stable value
and purchasing power that is typical of ordinary currencies.

Director of the Department of Currency Control and
Payment Systems of the National Bank of the Czech Republic, Michal Vodrazka,
stressed that bitcoin can be used when bypassing bans on certain payments, for
example, in online gambling. In this connection, he considers that it is
necessary that the Ministry of Finance of the Czech Republic should introduce
relevant norms in the modernization of legislation regulating activities
related to gambling.

WHAT
SHOULD I BE PREPARED FOR WHEN REGISTERING A CRYPTO EXCHANGER/CRYPTOCURRENCY
EXCHANGE IN THE CZECH REPUBLIC?

Despite the widespread possibilities in payments for
cryptocurrency, in the absence of legislative regulation, the government of the
Czech Republic is skeptical about cryptocurrency activities. For its part, the
National Bank of the Czech Republic banned local banks from opening accounts
for crypto activities, including bank accounts for crypto exchangers and
cryptocurrency exchange in the Czech Republic.

It should be noted that when carrying out business,
crypto exchangers/ cryptocurrency exchange in the Czech Republic must carry out
the procedure for identifying their clients in accordance with the KYC policy.
Also, Czech cryptocurrency exchanges and crypto exchangers must comply with AML
policy requirements and demand compliance with the AML policy from their
clients. The above rules apply to both sellers and buyers of cryptocurrencies,
and are caused by the requirements of the Czech Ministry of Finance and the
European Parliament due to concerns about widespread tax evasion and the
financing of terrorism.

ALTERNATIVE
TO THE CZECH REPUBLIC FOR REGISTRATION OF THE CRYPTO EXCHANGER AND
CRYPTOCURRENCY EXCHANGE

When registering a crypto exchanger/cryptocurrency
exchange, you should not dwell on the Czech Republic There are more loyal
jurisdiction for the crypto activities, such as Estonia, Malta, United Kingdom.
Estonian law provides obtaining a corresponding license for cryptocurrency
activities both in Estonia and abroad. Malta can rightly be considered an
island of Blockchain, where laws regulating activities related to
cryptocurrencies and blockchains are expected to come into force in 2018: The
Virtual Financial Assets Act (VFA); The Innovative Technology Arrangements and
Services Act; Malta’s Digital Innovation Authority Act (MDIA).

The UK is also loyal to cryptoexchange activity,
despite the lack of direct regulation. Cost-effective registration of a crypto
exchanger in the UK will make it easy to change fiat money to cryptocurrency
and back.

In view of the above, it is worth to think carefully
about the choice of jurisdiction for registering a cryptoexchanger or a
cryptocurrency exchange. An SBSB professional team will help you with this.
For over five years we have been advising our clients in the areas of corporate
law, international tax planning, finance, international licensing and
comprehensive business support in more than 40 countries.

We will be happy to help you.