In the evolving landscape of cryptocurrency regulation, nations are striving to establish frameworks to manage crypto exchanges. Lithuania and Dubai have emerged as notable players in this arena, albeit with distinct approaches towards licensing. A stark difference is evident in the number of licenses issued, the time taken to acquire a license, and the associated fees. Compare crypto exchange licenses in Lithuania versus Dubai to get a better understanding.
Lithuania has taken a more accessible approach, as reflected by the issuance of over 500 licenses to date. On the other hand, Dubai has treaded a more cautious path with only three licenses issued so far. The time frame for securing a license also varies significantly; while it takes an estimated 1-year to obtain a license in Dubai, Lithuania processes licenses within 30 to 60 days.
The table below outlines the cost associated with obtaining and maintaining a crypto exchange license in both regions:
In Lithuania, the authorization for a crypto exchange license encompasses a wide range of services including Exchange services, OTC, IEO, selling Bitcoin via bank transfer and debit/credit card, crypto to crypto, crypto to fiat, fiat to crypto transactions, and much more. Some of the major providers operating under Lithuania's regulatory umbrella include Simplex, CoinGate, Nexo, and Genesis Xchange. To be eligible for a license, companies need to adhere to a set of requirements including a share capital of €125,000, of which 25% (€31,250) has to be deposited immediately, and the remaining 75% (€93,750) within a year. Furthermore, they must have a bank account, a director (who can be any resident), and a local AML officer. The share capital can either be paid in Euros directly or through a crypto contribution (specifically in USDT via Metamask) with an additional charge of €10,000 for the audit process of the wallet which takes about a month. Conversely, Dubai has a more stringent and costly process. Binance world biggest crypto exchange, has been granted with crypto license in Dubai. The fees are considerably higher, with an application fee of AED 100,000 (USD 27,250), extension fee of AED 50,000 (USD 13,625), and a supervisory fee of AED 200,000 (USD 54,500). The share capital requirements are also substantial and are categorized based on whether the VASP is licensed by VARA to provide Custody Services or otherwise approved during the licensing process. The stark contrast between Lithuania and Dubai’s approach towards crypto exchange licensing portrays the different paths nations are taking in regulating this burgeoning sector. Lithuania’s more accessible and less costly licensing process has evidently attracted a higher number of crypto exchanges, fostering a more crypto-friendly environment. Meanwhile, Dubai's cautious and cost-intensive approach reflects its bid to ensure a higher level of scrutiny and control over the crypto exchange ecosystem within its jurisdiction.
Obtaining a Dubai crypto license to offer services related to cryptocurrencies is a must. If the UAE is your primary market. Securing this license should be a priority. Its recommended to check out the Dubai VARA license if you wanna understand Dubai licenses fully.