BitCoin acquiring (for legal entities)

Bitcoin Acquiring

Legal Scheme

Legal acquiring for Bitcoin and other cryptocurrencies is possible. Currently (as of 29.07.17), there are jurisdictions globally (information is available for a fee) where sufficient legal frameworks for cryptocurrency circulation have been established. These states have double taxation treaties with many countries where legislation in this area is not yet comprehensive. As a rule, the peculiarity of the status of cryptocurrencies in such jurisdictions is the recognition of “crypto” as a commodity, operations with which are subject to VAT. This, in turn, increases the cost of doing business. However, with the help of tax planning, this disadvantage can not only be mitigated but turned to your advantage.

Using classic financial technologies, it is possible, through a specifically structured chain of companies, to move the tax base from the jurisdiction of business operations to such a “right” state. This operation allows to avoid claims from tax authorities at the place of business.

Such structures greatly simplify the opening of current accounts and merchant accounts for acquiring Bitcoin and other cryptocurrencies, as a merchant account can be opened with a different MCC code, in accordance with the legislation “projected” onto the operator’s company, even if the circulation of cryptocurrency is directly prohibited by law in the state of business.

We are ready to advise our clients on all matters related to the creation of such structures for accepting payments for Bitcoin and other cryptocurrencies. This offer will probably be of most interest to exchanges wishing to optimise their commissions and raise their legal status. As usual, the preferred scheme of work is “turnkey business”.

Cryptocurrency Acquiring

Method of Legal Separation

The most reliable way to accept card and other payments for Bitcoin in jurisdictions with an uncertain legal status of cryptocurrencies is a more expensive and time-consuming method – the inclusion in the chain of a financial company that has the right to issue its own quasi-currency (NOT to be confused with crypto) and the opening of sub-accounts for its clients “within” its own account.

Technically, the client’s incoming payment is made with the purpose of “replenishing one’s own account” or “buying a quasi-currency”. The outgoing payment directly for Bitcoin is made with a different purpose. This works because payment systems based on Electronic Money Institution licenses are not subject to strict banking regulations and can even do without Know Your Client and Anti Money Laundering requirements. The technology is described in detail in the presentation of the project “Stream”.

We carry out a full cycle of work on the creation of such payment systems for our clients, including initial structuring (design) of the business, obtaining a license, creating and certifying software, opening merchant accounts, preparing all documentary support and further support.

Bitcoin Payment Acceptance

Brute Force Solution

The easiest way to acquire cryptocurrency is, of course, to directly open a merchant account with a little “rigging” of the data in accordance with the wishes of the accommodating bank. Our company has been opening merchant accounts for a wide variety of high-risk businesses for four years now. Our database contains hundreds of banks and processors, and we operate a “one-stop shop” system where you only need to fill out our form, and the information is “fanned out” to potential contractors (banks and payment systems). Of course, we also have advanced connections in banks, and we can solve the problem in this way at the client’s request.

This model is effective, but it is associated with significant risks, because the client, firstly, has the opportunity to make a chargeback, and secondly, as in any high-risk business, the delay in payment of funds received by the bank is very long, which creates a difficult problem with the volatility of exchange rates when creating an exchange or exchange office. In addition, banks themselves often close accounts and block funds, allegedly because they have been fined by one of the regulators, which is extremely difficult to verify. We do not recommend using such straightforward schemes.

Accepting Payments for Cryptocurrencies

The procedure for solving the problem with our help:
1. Initial contact, consultation
2. Writing the terms of reference (we will send you templates)
3. Based on the terms of reference, determine the feasibility and cost of the work
4. Payment for structuring (design)
5. Design / structuring
6. Payment for the legal framework (companies, licenses, accounts, agreements, software, etc.)
7. Implementation / production

Contact us!

If you are planning to create a cryptocurrency exchange or exchange office, if you need to accept card payments for Bitcoin, we offer you to contact us. During the cooperation, we will select the optimal acquiring scheme for your cryptocurrency business and, of course, implement it on a turnkey basis if required.

Alexey Zarin
Moscow, 2017

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