Latvia Cryptocurrency License

Latvia Cryptocurrency License

• Securing a Latvia Cryptocurrency License is crucial for navigating the expanding world of cryptocurrency assets in Latvia. The EU’s Markets in Crypto Assets (MiCA) Regulation establishes a unified framework for cryptocurrency asset activities, and Latvia has seamlessly integrated this into its own regulations through the Law on Cryptocurrency Asset Services. This legislation designates Latvijas Banka as the authority responsible for issuing licenses and overseeing cryptocurrency asset operations within the country.

• At Tetra Consultants we specialize in providing guidance and support to help our clients obtain cryptocurrency licenses, stay compliant with local and EU regulations and seize opportunities in the dynamic cryptocurrency market landscape.

Advantages of obtaining a Latvia Cryptocurrency License

The advantages of obtaining Latvia Cryptocurrency License are as follows:

Regulatory compliance

• In Latvia ensuring adherence to regulations is essential to establish trust and credibility in the marketplace. While the country currently lacks a specific national framework for cryptocurrency asset transactions it is expected to align with wider EU regulations like the Markets in Crypto Assets (MiCA) Regulation. This upcoming alignment is anticipated to improve regulatory transparency and ensure that companies comply with stringent standards ultimately promoting a reliable and reputable market atmosphere.

Access to growing cryptocurrency market

• Getting a cryptocurrency license in Latvia gives you the chance to tap into the growing cryptocurrency industry with great potential for businesses to cater to the rising need for cryptocurrency services. Being part of the European Union, Latvia opens access to a wider EU market, enabling companies to take advantage of regional expansion and reach a more diverse customer audience.

Building credibility and trust

• Obtaining a cryptocurrency license in Latvia greatly enhances the trustworthiness of a business and fosters confidence among clients and collaborators. In an industry where following regulations is crucial, having a license showcases a dedication to upholding legal norms and bolsters the company’s image in a competitive landscape.

Offering a range of services

• The Latvia cryptocurrency license can be utilized for various services, including cryptocurrency exchange, wallet management, and other related services. This wide array of services not only expands the scope of a business’s offerings but also helps attract a larger audience and gives more sources of income.

Adhering to AML/KYC requirements

• Under the law, Latvian cryptocurrency asset service providers are also obliged to apply AML and KYC norms. From July 1, 2024, enterprises will be obliged to register with the State Revenue Service and introduce an internal control system in accordance with the AML Law. The moved proposal is of great importance for maintaining an open and trustworthy business environment and for decreasing risks related to criminal activities.

Anticipated EU regulation alignment

• Latvia is ready to welcome the Markets in Crypto Assets (MiCA) regulation with the aim of having a single rulebook for the cryptocurrency sector across the European Union. This expected move will ensure that Latvian companies adhere to consistent EU standards simplifying their growth and activities in other EU markets.

Types of Latvia Cryptocurrency License

Cryptocurrency Exchange License

• Obtaining a Cryptocurrency Exchange License is relevant for those companies that are willing to operate cryptocurrency exchange platforms. It allows the buying and selling of crypto, considering strict AML and KYC rules. Furthermore, exchanges should cooperate with some bank or financial institution to handle traditional currency conversion. This setup ensures that the transactions are made in an environment that is safe, controlled, and thus instills confidence in people to believe in its operations.

Cryptocurrency Wallet License

• The Cryptocurrency Wallet License is necessary for that kind of business providing wallet services. It gives permission to have custody and be in charge of cryptocurrency assets on behalf of customers. For businesses that store and protect cryptocurrencies, it plays a role in making sure that appropriate security measures and regulations are complied with so as not to lose or have the assets stolen.

General Crypto-Asset Service Provider License

• But with the new MiCA Regulation, it has introduced a path for the General Crypto-Asset Service Provider License encompassing a wide array of crypto-asset services. This sort of broad license allows companies to:
• Provide custody and administration of crypto-assets: Safeguard and manage crypto-assets for clients.
• Operate a trading platform for Cryptocurrency assets: Facilitate trading activities through a regulated platform.
• Exchange crypto-assets: Conduct exchanges between crypto-assets and fiat currencies or other crypto-assets.
• Execute orders for crypto-assets: Act on behalf of customers to buy or sell crypto-assets.
• Market placement: Facilitate the issuance and placement of Cryptocurrency assets into the market.
• Receive and transmit orders: Handle customer orders for Cryptocurrency assets.
• Offer advice: Provide expert advice on crypto-asset investments.
• Portfolio management: Manage and optimize clients’ crypto-asset portfolios.
• Transfer services: Execute transfers of Cryptocurrency assets on behalf of clients.

Time required to obtain Latvia Cryptocurrency License

• Some factors that could contribute to the timeline for acquiring a license in Latvia would include upcoming EU regulations and lack of a national framework solely for Cryptocurrency transactions.
• The Markets in Crypto Assets Regulation, commonly known as MiCA, will take effect at the end of December 2024. It should therefore provide a uniform regulatory regime across all EU member states. The expected outcome of such a regime would even spill over to the issuance of licenses to Cryptocurrency asset service providers in Latvia.
• The Cryptocurrency license, under the proposed EU regulations, is supposed to be considered in a period of about 3-6 months, considering the stage. The timeline may very well change based on many factors, especially the specific requirements that will set by the national authority and the number of applications in their lot.
• At Tetra Consultants we are well positioned to assist you in navigating this changing regulatory environment and simplifying the application process for your Latvia Cryptocurrency License. Our expertise ensures that you handle these complexities efficiently positioning your business for success in the emerging Cryptocurrency market.

Key authorities of Latvia Cryptocurrency License

• In Latvia the responsibility for overseeing and regulating cryptocurrency licenses rests with authorities. This is crucial as the nation aims to align itself with the European Union’s regulatory framework. These authorities play a part in ensuring that Cryptocurrency asset service providers adhere to both national and EU regulations.

Latvijas Banka (Bank of Latvia)

• The body responsible for issuing licenses to Cryptocurrency asset service providers ensures that they comply with Regulation EU 2023/1114 and other relevant EU laws including the Markets in Crypto Assets Regulation. The Bank of Latvia has the authority to investigate and take actions against violations related to Cryptocurrency assets. Cryptocurrency asset service providers must register with the Bank of Latvia and keep it informed about their operations and any relevant information to maintain transparency and compliance.

Financial and Capital Market Commission (FCMC)

• In Latvia the Financial and Capital Market Commission plays a role in regulating the financial sector. However, the oversight of Cryptocurrency asset service providers is primarily handled by the Bank of Latvia. The FCMC’s involvement in supervision may also be pertinent to aspects of Cryptocurrency asset services that align with financial market regulations. Also, the FCMC ensures that practices adhere to established rules which may extend to Cryptocurrency assets.

Financial Intelligence Unit (FIU)

• The FIU shall focus on the AML/KYC policy enforcement. Its main mission is to monitor and investigate transactions from a standpoint of money laundering and other crimes in the Cryptocurrency asset market. The Financial Intelligence Unit will cooperate with the Bank of Latvia as well as with any other regulator to ensure full coverage and adherence to all requirements.
• Combined, regulators have been in discussions to clearly develop a Latvian Cryptocurrency asset market framework-one that corresponds to the standards set by the European Union to address compliance and supervisory requirements within the region.

Procedure to obtain Latvia Cryptocurrency License

Step 1: Company incorporation

• First and foremost, to operate under the cryptocurrency market of Latvia our experts will proceed to register company in Latvia by officially registering it in the Commercial Register of Latvia. The experts at Tetra Consultants are sufficiently efficient to make this possible within 3 weeks of the date of commencement of our services.

• We also provide full corporate bank account opening services for our customers, so your new company is ready and fully operational to start dealing in cryptocurrencies. In this way, it will be easy to establish a functional and compliant business presence in Latvia with maximum speed.

Step 2: Fulfill company requirements

• There are various requirements for the company depending on the business structure of the company. If choose to incorporate Limited Liability Company (SIA) there are various requirements which are as follows:

• At least 1 director without nationality requirements.

• At least 1 shareholder without nationality requirements.

• Minimum paid-up capital of €2,800 with at least half of it deposited in a temporary bank account.

Step 3: Submission of business model and information 

• Under this step, our experts will present the planned business model targeting, specifying what services, whom to sell to, and in which countries. Further, we will also provides information about the enterprise’s shareholders and officers. Also, the information specifies general information about the source of the funds. 

Step 4: Initial assessment by Latvijas Banka 

• Further, the Latvijas Banka notifies the applicant to get all the required papers signed, sealed, and submitted. 

• The Latvijas Banka shall inform the applicant how the application will be treated. 

• Thus, Latvijas Banka performs the initial evaluation of the project for its compliance with regulatory requirements and defines whether further process is possible. 

Step 5: Application Submission and preliminary review 

• Further, our experts will send in an application with all the required documents. Our experts at Tetra Consultants will guide and support the applicant to make sure that the application is completed and the documentation is in full readiness. 

• Latvijas Banka checks the application for completeness and accuracy. The applicant thereafter makes good of the deficiencies noted and re-submits the application and documents for re-verification. 

Step 6: Initiation of application assessment 

• The Bank of Latvia sends a letter to the applicant with notification on the beginning of the processing. 

• Our experts in Tetra Consultants will advise further to the applicant on the subsequent steps and also work to manage the follow-up requirements where necessary in the assessment. 

Step 7: Document assessment and request for additional information 

• Latvijas Banka examines the received documents in view of their completeness and identifies deficiencies or a requirement to complete additional information. 

• If necessary, Latvijas Banka arranges the meeting and prepares a letter concerning the necessary corrections or documents, which have not been presented. 

• The experts at Tetra Consultants will subsequently help the applicant make good the deficiencies noted and prepare corrections and additional documents as required. 

Step 8: Ongoing assessment and final corrections 

• After the said information and documents are received, Latvijas Banka continues the processing of the application. 

• In case further deficiencies will be identified by the follow-up inspection, Latvijas Banka organizes additional meetings and drafts a letter which points to the remaining issues. 

• The applicant makes necessary corrections and preparation of the final set of information and documents that need to be submitted, and the experts at Tetra Consultants review for completeness and accuracy. 

Step 9: Final decision and authorization 

• Latvijas Banka finishes reviewing the application and prepares a draft decision. It takes a decision, with or without reservations, regarding authorization-consent to enter the register or refusal thereof, considering the findings. 

• The applicant is authorized to start providing services upon issuance. 

• Experts from Tetra Consultants will further assist the applicant in fulfilling any conditions attached to the license and maintaining compliance while commencing their operations. 

Documents required to obtain Latvia Cryptocurrency License

• Articles of Association
• AML/KYC Policies
• A description of the measures implemented to ensure the segregation of customer crypto-assets and funds from the assets and funds of the crypto-asset service provider
• A description of the procedure for handling complaints
• Documentation on the policy and procedure for supervising and controlling outsourcing functions.
• Details of the directors and management personnel, including their business experience and skills.
• Confirmation letter presenting that directors have an impeccable business image, with no criminal records.
• Copies of notarized passports of shareholders, directors, and UBOs.

For corporate entities:

• Company registration documents which include:
• The founders’ agreement or decision on incorporation.
• Confirmation of the registered address and consent from the immovable property owner.

Requirements of obtaining Latvia Cryptocurrency License

There are various requirements for company to fulfill for establishing Latvia company for obtaining Latvia Cryptocurrency License. The requirements are as follows:

• The minimum share capital to establish a company in Latvia is €2,800. Additional capital requirements for the case of applying for the license, with a starting amount of €50,000; this would depend on the services offered.
• A company’s incorporation requires at least 1 director and 1 shareholder of any nationality.
• It is a must, for the license’s purpose, to have at least 1 local AML compliance officer.
• A registered office in Latvia would be sufficient both for the registration of a company and for the purposes of the license.

Cost of obtaining Latvia Cryptocurrency License

• In Latvia, the cost of a cryptocurrency license hinges on several factors as state duties, obligations for law observances, and other expenditures may come up during the process. We usually exercise total openness; therefore, we will gladly give you all-inclusive breakdowns of all monetary responsibilities connected to acquiring a license.
• Our service will also include itemized charts and breakdowns of all the costs associated with acquiring and maintaining the license, which enables the client to conceptualize their financial burden. In addition to the pure processing of the license application itself, we offer professional advice to our clients in decision-making about investments. We advise our clients to make accurate investment breakdowns and operate transparently so they can invest in the most judicious and responsible way possible to fulfill all licensing requirements.

Looking to obtain Latvia Cryptocurrency License

• Tetra Consultants will help you get a cryptocurrency license in Latvia in an end-to-end manner. Having guided you throughout the process of obtaining the license, we will further complement our services: from offshore financial licenses, offshore company incorporations to regulatory compliance consulting.
• Our pledge of transparency and consultation with specialists will ensure that you are not only well-informed but also adequately equipped in the management of your investment, while adhering to all essential regulations. Allow Tetra Consultants to guide your venture through detailed insights and customized solutions throughout successful setup and continuous compliance.
• Contact us to know more about Latvia Cryptocurrency license and our team will revert back in 24 hours.

FAQ

What does one need to do to issue a cryptocurrency license in Latvia?

What is the AML/KYC requirements?

Is a physical office in Latvia required?

How long does the licensing process take?

What are the duties of the AML officer?

Is it possible for foreigners to be a part of such a company?