Before you set up a cryptocurrency exchange.
Determine the service(s) you will provide as part of your cryptocurrency exchange, and what will be traded. For example, consider:
- Will you exchange crypto to fiat, crypto to crypto, or both?
- What virtual assets will be exchanged?
- Will you operate as a broker or market maker?
- Will you provide e-wallets?
- Will you provide other services (cross-border payments, DeFi, etc)?
Determine the structure of your cryptocurrency exchange. For example:
- Will you operate as a broker or market maker?
- Will it be centralised or decentralised?
- How will you maintain liquidity?
- What services will be outsourced (if any)?
Draw up an end-to-end funds flow, and crypto flow, diagram
Determine your target market and, if you are located overseas, what services will be provided in Australia
Set up an Australian entity (if required)
Seek legal advice on which Australian regulatory regimes apply
- Do you need an Australian Financial Services Licence (AFSL)?
- What are your obligations under the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Regime?
- Do any banking laws apply?
Prepare and lodge an AFSL application (if required)
Design and implement an AML/CTF Program including an AML/CTF Risk Assessment (if required)
Enrol and register as a Digital Currency Exchange with AUSTRAC (if required)
If you will outsource any functions, ensure appropriate outsourced agreements are drafted and executed
Draft Terms and Conditions, Privacy Policy and Data Breach Policy for your exchange
Draft Financial Services Guide and Product Disclosure Statement (if required)
Review promotional material for compliance with Australian consumer laws
Next steps
Read our blog on 5 Frequently asked Questions for setting up a Cryptocurrency exchange in Australia.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.