The competition in the crypto market is rapidly increasing as cryptocurrency is securing its foothold despite the varying prices. As per the recent developments, crypto asset companies can now apply licenses to handle as much as 100 million Swiss francs ($100 million) in public deposits under new regulations. The European government attempts to promote technological innovation as prior only commercial banks were allowed to receive such large deposits.
However, there is a number of stringent fiduciary and operational requirements for applicants. The applicants have to submit clear documentation that includes each and every detail of their business, target market and location. The financial regulator also requires information about board members and past records of criminal activity, if any. Moreover, the shareholders need to disclose their issued capital to Finma if it is more than 5 percent directly or indirectly.
Finma said that start-up or established companies in the crypto market must submit any information on agreements, such as shareholder deals and any “other ways in which the applicant may be controlled or materially influenced.” The license application must contain a detailed justification. All relevant information must be documented and changed documents must also be submitted with changes tracked, as reported on Bitcoin News.
However, there is a catch involved. Blockchain and crypto related business that is granted the fintech license to manage large amounts of investor funds “may not invest” or “pay interest” on the deposits. In reference to crypto start-ups, many naive companies have suffered a major decline due to the market crash. According to the report, many start-ups have been laying off large swathes of their workforces as bitcoin crash is knocking down emerging businesses, as mentioned in Telegraph.
Steemit, a blogging website funded by Steem, the digital coin, announced it planned to lay off 70 percent of its team after its digital coin fell 96 percent from its all-time high in January. Overall, the crypto market being volatile has both positive as well as negative effects.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]