Updated Requirements for Crypto Brokers

Since February 2024, there have been some changes in the work of crypto brokers. Recall that crypto brokers are residents of the Hi—Tech Park in Belarus, who act as intermediaries between sellers and buyers of digital assets.

Updated requirements for the heads of companies who want to become residents of the Hi-Tech Park as crypto brokers

1. Requirements for the Director

When applying for registration as a resident of the Hi—Tech Park, as well as within six months after that, the director of a crypto broker company may not have a qualification certificate of a securities market specialist of the first category, however, the presence of a deputy director with such a certificate is a prerequisite.

2. Requirements for the Deputy Director

The requirements for the business reputation of the deputy head of the crypto broker company have been established:

  • The absence of an outstanding criminal record for crimes against property and economic crimes, crimes in the field of information security both in Belarus and in the State of citizenship.
  • Absence during the last two years of dismissal at the initiative of the employer for culpable actions in Belarus.
  • The absence of dismissal due to discrediting circumstances in Belarus over the past two years.
  • The absence of a court decision over the past three years on the guilt of a person in the bankruptcy of a company in Belarus and in the state of citizenship of the person.
  • The absence of a criminal case in Belarus or in the State of citizenship of the person, or a criminal decision to recognize him as a suspect or accused in a criminal case.

Previously, there were no requirements for the deputy director of a crypto broker company.

When the director of the company does not have a qualification certificate of a securities market specialist of the first category at the time of filing an application for registration as a resident of the Hi-Tech Park, then the deputy head must have such a certificate.

The requirements for the official of the crypto broker responsible for risk management have been established

The qualification requirements for a crypto broker’s risk manager include:

  1. Availability of higher education.
  2. Work experience of at least 1 year in an economic or legal specialty in a company that conducted business in one or more areas:
  • Banking sector.
  • The insurance industry.
  • The scope of operations with non-deliverable over-the-counter financial instruments of fixed-term transactions, including contracts for difference.
  • Securities and securitization.
  • Investment fund.
  • Organization of an ICO or similar activity.
  • The operator of a cryptoplatform or similar activity.
  • The exchange of cryptocurrencies or similar activities.
  • Leasing.

An employee responsible for risk management may simultaneously perform the duties of an official responsible for compliance with the Hi-Tech Park regime.

Clarified the reporting requirements for cryptoplatform operators

The report that crypto brokers provide together with the application for registration as a resident of the Hi-Tech Park includes information about the applicant’s compliance with the requirements imposed on him by the Hi-Tech Park.

It is clarified that the conclusions that the applicant’s documents meet the requirements are given on the date on which the applicant submits an application for registration as a resident of the Hi-Tech Park or on another date, but not earlier than 30 days before the application date.

The cryptoplatform operator who prepared such a report is responsible for its validity and reliability.

New requirements for crypto brokers who use customer tokens for transactions with tokens of other customers

1. The requirement for an information system

A new requirement has been established for crypto brokers who use customer tokens to make transactions with tokens of other customers:

They must have an information system(s) for conducting such activities that have passed a technical audit. The technical audit should be confirmed by a report on the results of this audit.

2. The requirement to approve local documents

Crypto brokers who use tokens of some clients to make transactions in the interests of other clients must additionally develop and approve local documents on the following issues:

  • Closing customer positions.
  • Accounting and storage of notifications on the achievement of the standard of risk coverage when executing client’s orders of a value less than 0.

3. The requirement for the consent of clients to make transactions with their tokens in the interests of other clients

Crypto brokers who use tokens of some clients to make transactions for the benefit of other clients must obtain the consent of clients to use their tokens for the benefit of other clients. The agreement must be unambiguous. Consent can be expressed in writing, in the form of an electronic document or other electronic form (including the information system of a resident of the Hi-Tech Park using appropriate marks in the system), which provides an opportunity to establish that the client has given consent. The conditions on the obligation to issue consent to the use of the client’s tokens in transactions with other clients cannot be included in the contract with the client.

4. The requirement to terminate the transaction with the client’s tokens in the event that he withdraws his consent

The client may refuse to have his tokens used in transactions for the benefit of other clients. After the client withdraws his consent, it is necessary to immediately, but no later than 48 hours after receiving the withdrawal, stop using the tokens of this client to carry out transactions for the benefit of other clients.

5. Requirements for compliance with mandatory conditions when making transactions with tokens of some clients in the interests of other clients

The client provided collateral: money, electronic money, tokens. The specific list of collateral, which is the same for all clients, the cryptobroker determines independently. The cryptobroker publishes such a list on its website.

In case of changes in such a list, the cryptobroker must inform his clients in advance. This must be done no later than 24 hours before the start of the modified list.

6. The requirement for automated calculation and the amount of standards

A cryptobroker who makes transactions with tokens of some persons in the interests of other persons must provide automated calculation of standards:

  • Covering the risk in the execution of the client’s orders.

This is the difference between the value of the client’s portfolio and the size of the initial margin. The minimum size of this standard is established as a general rule in the amount of 0. But there may also be negative values. The cryptobroker must notify the client about the negative value of this standard. There is no need to notify when the contract with the client provides that the crypto broker informs the client at least once an hour during token trading about his current portfolio value and initial and minimum margin.

  • Covering the risk of changes in the value of the client’s portfolio.

This is the difference between the value of the client’s portfolio and the size of the minimum margin. The minimum allowable value of this standard is 0. In some cases, this standard may have a negative value. A cryptobroker should strive to bring this standard to a value greater than 0. To do this, he can, without a special order from the client, close all or parts of his positions through transactions at the client’s expense for the purchase (sale) of the required number of tokens.

7. The requirement for the number of tokens of other clients

All customers who have agreed to use their tokens should not allow one customer to use a greater number of tokens for the benefit of other customers than the total number of tokens they collectively own.

What a crypto broker that uses tokens from some clients to make transactions for the benefit of other clients can do

The cryptobroker who uses tokens to make transactions for the benefit can determine additional conditions for making such transactions himself.

Features of token input and output

1. Entering tokens

The client indicates the ID of his virtual wallet on the secure, authorized pages of the crypto exchange, excluding access to this information for the crypto broker.

The cryptobroker must immediately inform the client about deposit and withdrawal operations, utilizing an automated system for notification, with no minimum or maximum deadlines specified.

Prior to the change in the order of operation of the crypto exchanges, the client’s authorization procedure was not specified.

2. Withdrawal of tokens

When withdrawing tokens, the client specifies their virtual wallet address on the secure authorization pages of the crypto exchange. This action ensures that the crypto broker does not have access to these addresses. Previously, the authorization procedure was not specified.

How to contact us

For more information or advice on the updated requirements for crypto brokers, do not hesitate to contact us. We are here to help and support you.
Phone and e-mail communication options are available for your convenience:

  • +375293664477 (WhatsApp/Telegram/Viber);
  • info@spex.by.
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