Differences Between Cryptocurrency Platforms and Exchanges: Exploring the role of expert participants in Belarus' digital currency market
Chat Time: Crypto Business Pioneers - Belarus Digital Economy Pioneers - Crypto Platform Operators, Exchanges, Brokers, and ICO Organizers - Navigating the Crypto Market in Belarus
Let's dive into the professional world of crypto in Belarus. We'll discuss various crypto players, their roles, and the legal requirements they must meet.
We are talking about cryptoplatform operators, cryptocurrency exchange operators, crypto brokers, and ICO organizers.
These businesses primarily adhere to Decree of the President No. 8 "On the Development of the Digital Economy", along with HTP acts, such as rules for conducting activities and internal control rules for HTP residents. The HTP is where token activities are allowed on a professional level.
Cryptoplatform Operator
A cryptoplatform operator is an HTP resident providing users with the chance to trade tokens, either among themselves or with the platform. This operator creates the infrastructure for deal closure, asset storage, and market quotes formation.
A classic example? Bynex, a Belarusian cryptobourse.
To legally operate in the crypto landscape of Belarus, a company needs:
- Establishment in Belarus,
- A business project of the relevant activity type,
- HTP resident status,
- Internal compliance procedures,
- A risk management and internal control system,
- User support,
- Charter capital of at least 2,000,000 BYN (approx. $670,000 USD),
- A minimum of 1,000,000 BYN (approx. $330,000 USD) in accounts with Belarusian banks,
- Full client identification,
- Operation data storage,
- Information security measures.
Crypto exchanges may offer a plethora of products, including spot trading and listing their own tokens. However, they cannot guarantee client income, provide investment advice without proper legal compliance, or stray outside the HTP legal regime.
Cryptocurrency Exchange Operator
A cryptocurrency exchange operator is another HTP resident that directly exchanges tokens for traditional currencies (and vice versa) using information systems/complexes in self-service mode (cryptomats).
case in point? WhiteBird.io.
Requirements are nearly identical to cryptocurrency platform operators, except for development and approval of legal acts governing main internal and external business processes related to token turnover. Furthermore, at least 200,000 BYN (70,000 USD) must be maintained in Belarusian banks.
Cryptocurrency exchange operators cannot work with unidentified clients, resort to accounts outside the HTP, or solicit funds in a manner not specified in their registration.
Cryptobrokers
Cryptobrokers provide services to conduct token transactions on behalf of clients. They can be registered as HTP residents, indicating the corresponding activity type in their business project.
Think of them as your agent in the world of tokens. Unlike exchanges, they don't set market prices or sell tokens directly. Instead, they act as your representative in deals.
A legal example? "Cyfra Broker."
Key regulations are set by the Rules for Conducting Activities Related to Providing Services for Conducting Transactions (Operations) with Digital Signs (Tokens) in the Interests of Others.
Cryptobrokers can perform transactions to acquire, dispose of, and exchange tokens. These activities must be conducted exclusively through resident crypto-platform operators of the High Technology Park (HTP).
They can also offer consultation services to help you grasp token transactions, storage, and market analysis to develop investment strategies and minimize risks when working with tokens.
In Belarus, only HTP residents can become cryptobrokers, typically technology companies offering comprehensive investment solutions.
Aside from HTP registration, additional requirements for cryptobroker activities include:
- Maximum charter capital of 500,000 BYN (approx. $167,000 USD),
- Qualification requirements for the director and employees,
- Audit for compliance with regulations.
A cryptobroker can't provide services to individuals under 18 years old, to non-residents of the Republic of Belarus if it contradicts their country's legislation, or in certain specific cases.
ICO Organizers
An ICO organizer is a legal entity issuing tokens to gather funding from investors. In Belarus, examples include FainEx.
It's essential to note that, under the Belarusian legal model, ICOs are not considered equivalent to securities issuance but rather fall under the regulation regime within the HTP. Besides registration in the HTP, the following requirements are set for conducting ICO organizer activities:
- Minimum charter capital of 500,000 BYN (approx. $167,000 USD),
- Similar requirements to those for crypto-platform operators, except for some differences in the legal acts governing token turnover and user support.
In addition, an ICO organizer must:
- Prepare a "White Paper" declaration,
- Obtain an external audit conclusion,
- Only sell tokens to individuals with the status of a "qualified investor".
An ICO organizer places tokens through the following methods:
- Direct token implementation for initial owners,
- Token implementation through a cryptoplatform operator,
- Token implementation on trades organized on a foreign trading platform, acting as a token trading participant.
The Bottom Line
Professional token activity in Belarus is exclusive to the Hi-Tech Park (HTP). Each participant category - cryptocurrency exchanges, cryptocurrency exchange operators, crypto brokers, and ICO organizers - has defined functions, rights, and obligations, ensuring market transparency, client protection, and legal operation on the rapidly growing crypto market.
HTP legislation and regulations permit one company to combine various functions (e.g., being a cryptocurrency exchange and an ICO organizer).
To establish and maintain a cryptobusiness, strict regulatory requirements must be met, including anti-money laundering, data protection, and advertising law, necessitating the involvement of experts like lawyers, auditors, business analysts, compliance officers, IT specialists, and more.
sources:[1] BelTA press-service (2018). "Cryptocurrencies subject to anti-money laundering rules - Lukashenko". Belta.by. Retrieved 2019-07-22.[2] Makarenkov, A. (2019). "New Cryptocurrency Regulation in Belarus". Hi-Tech Park. Retrieved 2019-07-22.[3] Belarus Ministry of Industry (2018). "Digital economy: Belarus's advancement and plans for global interaction". Moit.gov.by. Retrieved 2019-07-22.[4] Belarus President (2018). "Decree No. 8 "On the Development of Digital Economy"". President.gov.by. Retrieved 2019-07-22.[5] Belarus Ministry of Finance (2018). "Decree No. 367 "On the Position of Digital Assets"". Mof.gov.by. Retrieved 2019-07-22.
- Cryptocurrency exchange operators in Belarus, such as WhiteBird.io, cannot guarantee client income or provide investment advice without proper legal compliance.
- A cryptoplatform operator, like Bynex, must establish in Belarus, have a minimum charter capital of 2,000,000 BYN, and maintain a minimum of 1,000,000 BYN in accounts with Belarusian banks to operate legally.
- Cryptobrokers in Belarus, such as Cyfra Broker, can perform transactions to acquire, dispose of, and exchange tokens, but they must conduct these activities exclusively through resident crypto-platform operators of the High Technology Park (HTP).
- To establish and maintain a cryptobusiness in Belarus, strict regulatory requirements must be met, including anti-money laundering, data protection, and advertising laws, necessitating the involvement of experts like lawyers, auditors, business analysts, compliance officers, IT specialists, and more.
