1. Exchange activities with regard to tokens that are neither financial instruments, nor e-money:

  1. Crypto-crypto
    • "Crypto Exchange Office" (proprietary trading, if profit is mostly market driven; principal trading, if profit is more commission driven).
    • Trading of tokens for other tokens against the own account. Currently no license/registration requirements.
    • "Crypto Matching" (matched principal trading)
    • Matching of interests only with regard to tokens including the clearing and settlement (in crypto). No license/registration requirements.
    • "Crypto Agency Trading" (agency trading)
    • Acting as a commercial broker on behalf of the buy- and/or sell-side (including clearing and settlement of orders). No license/registration requirements.
    • "Bulletin Board"
    • Displaying buy- and sell orders (crypto-crypto; and potentially matching); settlement conducted directly by users. Currently no license/registration requirements.
  3. Crypto-fiat
    • "Exchange Office"
    • Trading of tokens against fiat (and vice versa) against the own account. No license requirement but FMA needs to be notified of the commencement of business activities. Required to be fully compliant with Due Diligence Act.
    • "Matching"
    • Matching of interests with regard to crypto:fiat. The matching of interests is not subject to any regulation, however the clearing and settlement in fiat will require some sort of payment service license or could be deemed a banking activity if deposits are accepted (deposit business).
    • "Agency Trading"
    • Acting as a commercial broker on behalf of the buy- and/or sell-side (including clearing and settlement of orders). Still possible without a license under the commercial broker/agent exemption under the Payment Service Directive I (PSD I). Under PSD II (already in force in the EU; supposedly entering into force in Liechtenstein on October 01, 2019) it will no longer be possible to act on behalf of both parties (buy- and sellside) and make use of this exemption. Therefore, a license as a Payment Service Provider will be required.
    • "Bulletin Board"
    • Displaying buy- and sell orders (crypto-fiat; and potentially matching); settlement conducted directly by users. Currently no license/registration requirements.

2. Exchange activities with regard to tokens that are financial instruments:

  • "Proprietary Trading/Principal Trading/Agency Trading"
  • Investment Firm license required when trading financial instruments against the own account or on behalf of the client. Need to be fully compliant with financial market regulations (CRD IV, MiFID II, MiFIR, EMIR, etc.)
  • "Trading Venue"
  • Investment Firm license required when matching of interests with regard to financial instruments. Multilateral or Organized Trading Facility (MTF/OTF) required on top of the investment firm. Need to be fully compliant with financial market regulations (CRD IV, MiFID II, MiFIR, EMIR, etc.)

3. Exchange activities with regard to tokens that are e-money:

  • "Bilateral Trading" (proprietary trading)
  • Trading of E-money against fiat against one's own account is possible. This will be deemed an activity reserved to an exchange office. Therefore, registration with the FMA is necessary and due diligence duties apply.
  • "Multilateral Trading" (matching)
  • The matching of interests with regard to E-money is not possible pursuant to EFTA-Court Decision. This is due to the fact that E-money must be redeemed at par value at all times.
  • "Agency Trading"
  • Acting as a commercial broker on behalf of the buy- and/or sell-side (including clearing and settlement of orders).A license as Payment Service Provider is required.

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.