How Exchange Licensing Works in Practice

A crypto venue serving retail customers in a regulated market needs authorisation. What that involves is published and rarely read.

What an applicant must demonstrate

Capital. A minimum, scaled to the size and nature of the business, held in a form the regulator accepts.

Segregation of client assets. Customer holdings identifiable and separate from the firm’s own, with a legal structure intended to survive the firm’s insolvency.

Governance. Named individuals in defined roles, assessed as fit and proper, with documented responsibilities.

Anti-money-laundering systems. Identity verification, transaction monitoring, sanctions screening and reporting.

Operational resilience. Business continuity, incident response, and an orderly wind-down plan.

Custody arrangements. How keys are held, who can authorise movements, and what insurance applies.

Complaints handling. A documented process and, in most regimes, access to an external dispute body.

What it does not guarantee

Solvency. A licence is a set of requirements, not a guarantee that the firm is well run.

That your assets are insured. Coverage varies enormously and exclusions are substantial.

That the platform will not fail. Licensed firms have failed.

What it does provide is supervision, obligations that can be enforced, and a process that exists when something goes wrong.

Why availability differs by country

Authorisation is granted per jurisdiction. A firm licensed in one market must obtain permission separately elsewhere, or operate under a passporting arrangement where one exists.

That is why a platform available to one reader is unavailable to another, and why terms and asset availability differ between markets on the same brand.

How to check

Every regulator publishes a register of authorised firms, searchable by name. It takes thirty seconds.

The register shows the legal entity, the permissions held, and any conditions or restrictions. It is the primary source and it is more reliable than anything on the firm’s own site.

What to look for in the register entry

The exact legal entity, which may differ from the brand name. The specific permissions, since a firm may be authorised for some activities and not others. Any conditions attached.

A brand operating through an entity that does not appear in the register of the country where you live is not authorised there, whatever the website says.

Venues that publish their registration details and entity names openly, such as exchanges licensed in the jurisdiction, make that check straightforward. Those that do not have answered a question by omission.