Crypto investing requires constant analysis and monitoring. Stock market players need to monitor all trades to improve results and find errors. In this article, we will look at how to set up your crypto-exchange to achieve profitable trading.
Our company is an expert in the field of establishment and licensing of business structures. We work all over the world, particularly, with offshore spaces, helping interested investors in launching business projects.
Our lawyers will provide every client with comprehensive assistance in obtaining a license for crypto activities click here, for a gambling firm, a Forex project, and much more.
Types of crypto-exchanges
Crypto-exchange is more than just technology. This business includes several directions and components that a business owner must consider when starting a company.
For example, legal issues, marketing, sales, management, finance, liquidity, technology, etc. There’re several categories of cryptocurrency exchange spaces, one of which must be chosen before launching your platform.
1. Centralized Exchanges (CEX) – It’s a commonly-chosen class of exchanging platform, the main feature of which is the presence of a centralized operator responsible for its security, updates, and functionality. Key advantages offered by such sites are the speed of crypto transactions and the absence of liquidity problems.
It’s loosely divided into the following three categories:
- spot trading, when users can trade their funds. At the same time, the one who owns the crypto-platform will receive a commission;
- margin trading;
- derivatives, where the user can access positions with leverage up to x100.
Then we will highlight a few more categories.
2. Decentralized (DEX). In such spaces, sellers and buyers of crypto-currencies can contact each other, automatically exchanging their assets. The intermediary does not take part in the transaction.
3. Peer-to-peer (P2P). This’s reminiscent of virtual platforms where advertisements for the purchase/sale of crypto-currency are posted.
4. Exchangers with instant operations. These are easy-to-use platforms where you may carry out the usual exchanging deals. The user opens a trading order, which is executed at the same moment.
Choosing the regulation
Jurisdictions with a higher level of technological and general economic development support crypto-currencies in possible ways and establish effective, strict, but at the same time loyal regulation for operations with them, in particular, exchanging ones.
Now, among countries with stringent crypto-regulation, countries with emerging markets dominate, risks for which are higher. Several jurisdictions already have progressive and detailed legislation.
These are jurisdictions in Europe and Asia, such as Malta, Singapore, Georgia, Japan, and Estonia.
When choosing a regulation for a crypto exchange, it’s necessary to bear in mind the target region of future clients and exchange functionalities.
Particularly, if the exchange has and uses staking, crypto derivatives, and security tokens, regulators can put forward increased requirements for such a business project.
Choosing the software
For its effective activity, crypto-exchange requires the presence of well-developed software. The entire functionality of the exchange rests on several software elements:
- back office;
- user interface widgets;
- trading engine;
- trading API;
- CRM;
- wallets with a protective mechanism.
In addition, mandatory integrations with payment providers and liquidity providers are required.
You can develop your software, or take a ready-made White Label and customize it. It is important to consider the functionality of the exchange and its type: spot trading, margin trading, and so on. P2P exchanges require a less complex software solution as they are the simplest type.
In addition, crypto-exchange can act as an NFT marketplace. This’s the latest solution for the sale of collectibles and digital art.
Crypto-exchange can also engage in staking. This term should be understood as receiving passive income through the simple storage of crypto coins.
Choosing liquidity providers
Such providers for crypto projects are firms offering liquidity on cryptocurrency exchanges. They give traders abilities to conduct operations over some time up to a few seconds. This increases their chances of making trades at the desired prices.
A competent and correct choice of such a company is also guarantee traders can deposit and withdraw assets from crypto exchanges easily and without any additional difficulties.
This is because they use sophisticated systems to manage risk. These technologies ensure secure and smooth transactions.
In choosing such provider, the next-mentioned factors should be considered:
- competitiveness of commission fees;
- a wider range of trading opportunities;
- ability to support multiple crypto-currencies;
- advanced measures to ensure and maintain security.
Our experts will help you in choosing a reliable partner that can fully meet your needs.
Obtain a license
To legally conduct crypto activities, it is necessary to get a special license locally where the crypto-exchange intends to operate.
Obtaining a crypto license requires full compliance with the rules and regulations put forward by the local regulatory authority. Such requirements vary by jurisdiction.
In addition, you can resort to the option of a ready-made crypto exchange with a license. Our experts help you in selecting the appropriate and lucrative crypto-project for your needs.
Opening a bank account and connecting cards processing
An organization can open an account for crypto-currency use in a crypto-friendly banking institution. Among them are both traditional institutions and neo-banks that operate only online. They do not tend to block accounts opened in cryptocurrency.
As a rule, they also do not set excessively stringent requirements for a potential client and do not put forward restrictions on any type of business activity. With such institutions, there are also no other problems that customers of classical banks have to put up with.
Connecting crypto cards is access to payment processing, which allows clients to pay with crypto-currency or e-money. There’re several crypto-processing providers worldwide that are available for integration.
In particular, commonly-chosen of them are Bitpay, Coinbase, CoinPayment, and B2WinPay. The key advantage of cryptoprocessing is the complete automation of operations. The procedure for connecting crypto-currencies, in general, is as follows.
- First, you need to register on the website of the crypto-processing service.
- Then you need to add a project to your account by filling out a special form.
- Choose a connection method from the suggested ones.
Connecting crypto cards on your own is a rather complicated procedure. Please contact our specialists for procedural assistance.
Sustainability of business-processes
For the maximum efficiency and sustainability of business processes, it is necessary to provide the crypto-exchange with the necessary tools, moreover, by doing it correctly.
Our firm is ready to provide you with proper procedural assistance when launching a crypto exchange, taking care of the most complex aspects and nuances.
This article was prepared by Denys Chernyshov, a lawyer, founder, and CEO of the well-known company Eternity Law International, as well as the recently launched international medical project Eternity Life Clinics.
