The global digital asset industry is rapidly evolving, and regulatory scrutiny is increasing across jurisdictions. For businesses operating in cryptocurrencies, tokens, exchanges, wallets, or blockchain-based financial services, obtaining a crypto and virtual asset license is no longer optional—it is a regulatory necessity.
Governments and financial regulators worldwide now require crypto-related businesses to operate as Virtual Asset Service Providers (VASPs) under clearly defined licensing frameworks. Without proper authorization, businesses face bank account closures, penalties, or operational bans.
This guide explains what a crypto and virtual asset license is, why it matters, key jurisdictions, compliance requirements, and how regulated licensing supports long-term growth.
What Is a Crypto and Virtual Asset License?
A crypto and virtual asset license is a regulatory authorization that allows a business to legally offer services involving digital assets. These services may include:
- Cryptocurrency exchanges
- Wallet and custody services
- Token issuance
- Crypto payment processing
- Brokerage and trading platforms
Regulators classify these businesses as Virtual Asset Service Providers (VASPs), following guidance from the Financial Action Task Force (FATF).
FATF – Virtual Assets and VASPs
https://www.fatf-gafi.org/en/topics/virtual-assets.html
Licensing ensures transparency, consumer protection, and compliance with global AML and counter-terrorist financing standards.
Why a Crypto and Virtual Asset License Is Mandatory
Operating without a crypto and virtual asset license exposes businesses to serious risks.
Key reasons licensing is essential:
- Regulatory compliance: Required by law in most jurisdictions
- Banking access: Banks require licensed status
- Market credibility: Investors prefer regulated businesses
- Operational stability: Prevents sudden shutdowns
- Global expansion: Enables cross-border operation
Crypto and Virtual Asset License vs Company Formation
A common misconception is that company formation alone allows crypto operations. In reality, company formation is only the first step.
| Aspect | Company Formation | Crypto & Virtual Asset License |
|---|---|---|
| Legal entity | Yes | No |
| Crypto operations | No | Yes |
| Banking approval | Limited | Strong |
| Regulatory status | None | Approved |
Learn about company formation services:
https://7baas.com/services/company-formation/
Proper licensing must align with company structure from the start.
Key Jurisdictions for Crypto and Virtual Asset Licensing
Choosing the right jurisdiction is critical when applying for a crypto and virtual asset license. Each country has different regulatory expectations, timelines, and costs.
Popular licensing jurisdictions include:
- Canada
- United Kingdom
- European Union
- United Arab Emirates
- Lithuania
For example, in the UK, cryptoasset firms must register with the Financial Conduct Authority (FCA) before operating.
FCA – Cryptoasset Registration
https://www.fca.org.uk/cryptoassets/registration
Crypto licensing support:
https://7baas.com/services/crypto-virtual-asset-licensing/
Core Compliance Requirements for a Crypto and Virtual Asset License
Regulators assess more than just business registration. Licensing approvals depend heavily on compliance readiness.
Common requirements include:
- AML and KYC policies
- Risk assessment frameworks
- Governance and internal controls
- Source of funds documentation
- Ongoing reporting obligations
Failure to meet compliance standards is one of the most common reasons crypto license applications are rejected.
Crypto and Virtual Asset License for Startups
Crypto startups often underestimate the complexity of licensing. Regulators expect startups to demonstrate:
- Clear business models
- Transparent ownership structures
- Adequate compliance resources
Early planning ensures smoother approvals and faster operational readiness.
Startup formation guidance:
https://7baas.com/services/startup-business-formation-guidance/
Buying a Licensed Entity vs Applying for a New License
Some businesses choose to acquire an existing licensed crypto or MSB entity instead of applying from scratch. This approach can reduce time-to-market.
Buying and selling registered Canadian MSBs & PSPs:
https://7baas.com/buying-and-selling-registered-canadian-msbs-and-psps/
This option is particularly useful for businesses requiring immediate operational capability.
How 7BAAS Helps With Crypto and Virtual Asset Licensing
At 7BAAS, crypto and virtual asset licensing is handled as a full regulatory project, not just paperwork.
We assist with:
- Jurisdiction selection
- Company formation alignment
- Crypto and virtual asset license applications
- AML/KYC framework development
- Regulator and bank readiness
Explore all services:
https://7baas.com/services/
About 7BAAS:
https://7baas.com/about-us/
Our approach ensures long-term compliance, operational stability, and credibility.
Final Thoughts
Obtaining a crypto and virtual asset license is a foundational step for any serious digital asset business. Licensing enables regulatory compliance, banking access, and sustainable growth in an increasingly regulated crypto ecosystem.
For crypto businesses seeking long-term success, professional licensing support is essential.
Contact 7BAAS to structure and license your crypto business correctly from day one.
