A cryptocurrency exchange
is a service that allows clients to trade virtual currencies either for other types of digital currencies or for conventional, fiat money. The exchange is part of the services required by individuals who deal in cryptocurrencies, along with the wallet service that allows them to store their digital currencies.
Investors who are interested in exploring the cryptocurrency field can open an Isle of Man cryptocurrency exchange. The company can provide the solutions, in the form of an app or service, for the purchase, sale, and use of the digital currencies. In addition to this, the company can develop other products in time, as the aforementioned wallet.
In this article, our team of Isle of Man company formation agents
discusses solely the opening of a cryptocurrency exchange. We invite investors who need more information, or additional details, to reach out to our agents if they have more questions.
The crypto exchange
A cryptocurrency exchange service will offer the needed services to buy and sell Bitcoin and other cryptocurrencies. These can be exchanged with one another, for example, Bitcoin for Litecoin or regular currencies can be exchanged for cryptocurrencies.
Investors who start a cryptocurrency exchange will need to have a business and a marketing plan. These types of services are offered online and via a mobile app that allows its users to make the exchange as quickly as possible. Hiring a talented team of software programmers and user experience designers will be an important step when developing the product.
When using a cryptocurrency exchange, clients will expect instant buys and a mobile app that is optimized according to their device of choice so that they can carry their preferred digital currencies and/it fiat currencies as desired.
Regulations for cryptocurrency companies in the Isle of Man
Cryptocurrency companies in the Isle of Man
operate under a set of criteria that have to do with the number of resident directors and the manner in which the company is controlled. These regulations are designed to allow for better control of legal entities operating in this field, control exercised by the Isle of Man Financial Services Authority
The new regulations for cryptocurrency companies require that these types of businesses have at least two resident directors and they must be managed and controlled from the Isle.
In addition to this, local regulations describe four types of currencies:
digital currency: the electronic version of a fiat currency; can include representations of virtual currency;
virtual currency: the digital representation of a value that may be traded digitally; is not centrally controlled or administered;
convertible virtual currency: this category includes cryptocurrencies that can be converted into fiat currencies through a cryptocurrency exchange.
non-convertible virtual currency: it cannot be transferred to another individual and cannot be concerted or redeemed for fiat currency through an exchange.
Isle of Man company formation statistics
The Isle of Man is among the top locations for company formation in Europe, mainly due to its favorable taxation policies. It is also one of the countries that are working on developing an advantageous cryptocurrency regulation.
The statistics below, offered by the Government, highlight the evolution of the number of companies in 2019:
- the total number of companies incorporated in Q1 2019: 205 1931 Act Companies and 173 2006 Act Companies.
- the number of companies incorporated in Q2: 171 1931 Act Companies and 203 2006 Act Companies.
- companies incorporated at the end of Q3: 201 1931 Act Companies and 173 2006 Act Companies.
At the end of Q3, there were 7 registered foreign companies.
The different statistics refer to companies that have been incorporated as per the 1931 Companies Act and the 2006 Companies Act. The distinction is a relevant one as the newer act introduced a number of important provisions that increased the attractiveness of the jurisdiction.
New cryptocurrency companies that are incorporated in the Isle of Man are registered as per the 2006 Isle of Man Companies Act.