More than 300 million people around the world are estimated to own cryptocurrency, based on statistics showing an average ownership rate of 3.9 percent. At this time, over 18,000 businesses are accepting bitcoin and other cryptocurrencies from customers.
Businesses are launching cryptocurrency exchange platforms in order to profit from the growing popularity of cryptocurrency. This step-by-step guide will help you if you plan to launch a white label crypto exchange software in 2022. Here’s A beginner’s guide on cryptocurrency exchange if you’d like more information.
Begin developing your white label cryptocurrency exchange software:
1. To ensure that all licensing requirements are met, consult with a lawyer.
Before implementing your strategy, you should seek legal counsel to understand the regulatory requirements of your new business. All jurisdictions where the firm intends to operate will necessitate a license. Because government regulations have lagged behind technological advancements, many cryptocurrency exchanges operate with little oversight. Other countries, such as the United States, require Bitcoin operators to be licensed Money Transmitter firms and to follow SEC and CFTC rules and regulations. Proper legal counsel is required. Because exchanges fall under the purview of currency exchange, businesses must adhere to Know Your Customer (KYC) requirements, which have become increasingly prevalent in order to prevent money laundering. As a result of the Patriot Act, these laws, for example, have been in effect in the United States since 2002. Regulations vary by jurisdiction, so consult with an attorney who is familiar with the industry.
2. Assuring Access to Venture Capital
Before you start developing white label crypto exchange software, you should have an idea of how much it will cost. The development cost includes technology, hosting, some preliminary legal advice, government registration, and preliminary advertising. While not all funds are required upfront, it is critical that the company has access to enough capital to provide a proper runway. Most startups make the mistake of failing to plan for the future, which results in small initial fundraising that may cover development costs but leaves the company without the critical funding required for operations until it becomes profitable. Startups frequently make the mistake of obtaining authorization from unscrupulous cryptocurrency exchange providers who charge recurring fees and fail to disclose the legal obligations and costs associated with establishing and operating an exchange.
3. Find a White Label Cryptocurrency Exchange Solution
Here Are 10 Steps To Starting Your Own White Label Cryptocurrency Exchange In 2022.Contact a company that provides a world-class cryptocurrency white label exchange for a one-time fee that includes no royalties or compensation arrangements. This means that there are no recurring costs, that clients can host the exchange themselves, and that clients receive complete source code, which is important for auditing purposes because certain regulators require that the source code be inspected. The company has years of experience developing stock exchanges, including backend technology used by some of the world’s leading exchanges, and is always looking for new ways to add value to its clients.
What is the purpose of white labeling source code? White label exchange software with full source code allows for complete customization of a custom-built exchange while significantly reducing time to market and development costs.
4. Increase the liquidity of your exchange by connecting it to others.
Every effective exchange is built on liquidity. Prospective customers will be skeptical of your new business if it lacks an order book and trading activity. You may connect your exchange to a network of current exchanges, increasing its liquidity, to avoid these challenges and the need to imitate activity through dummy accounts inside the new exchange. Remember that the larger the exchange network, the less liquidity your new exchange will face.
5. A Payment Processor should be involved in the collaboration.
Payment processors are not all the same. Fee arrangements, for example, will vary greatly between businesses. You must have the lowest transaction rate to compete with other exchanges. In addition, some processors include hidden fees in their contracts, so make sure you understand what you’re signing. Settlement time and PCI DSS compliance, which is a set of best practices for ensuring cyber security, are two other differences between processors. It is worth noting that in the United States, federal law does not require compliance, whereas many state laws do. Make sure your payment processor is PCI-compliant to protect your new business from cyber threats. This is just one more example of why it is critical to understand the complexities of industrial regulation.
6. Best Practices in Information Security
Cryptocurrencies have grown in popularity as a target for cybercrime and hacking. As a result, it is critical that you fortify your exchange with the appropriate security features. choose the right white label crypto trading platform which is the most secure in the world, with offline cold storage wallets, two-factor authentication, and encrypted databases.
7. Through beta testing, you can go live.
You’ve set up your exchange. You’ve made an agreement with a payment processing company. And you’ve gone to great lengths to ensure that your transaction complies with all applicable rules and regulations. You have ensured that your company is secure from cybercriminals. It’s finally time to launch your exchange and put all of its features to the test in beta.
8. Begin a marketing and public relations campaign
Once your exchange is operational, reach out to crypto news outlets such as Coindesk. To ensure that your initial raise does not leave you scrambling for additional funds, it is critical to properly organize your marketing initiatives as well as their expenditures. Exchanges frequently lack a marketing budget, relying instead on free social media marketing to reach a critical mass of traders.
Also read: How Can An Initial Coin Offering (ICO) Improve Your Business’s Growth?
9. Exercise Caution When Providing Customer Support
While customer service is the final step in establishing a successful cryptocurrency exchange, your ability to excel in this area will determine your long-term success. Those who interact with customers must be attentive and respond satisfactorily to customer complaints and technical difficulties. Because cryptocurrencies never stop trading, consider installing a ticketing system like ZenDesk and staffing it with experienced and helpful personnel who are available 24 hours a day, seven days a week.
10. Compliance Requires an Ongoing Legal Team.
You cannot overstate the importance of maintaining legal compliance and adhering to all current and proposed laws and regulations, not only in the jurisdiction in which your exchange is domiciled but also in all foreign jurisdictions where your exchange members or traders will reside or conduct trading. Because cryptocurrency rules are constantly changing around the world, it is critical to either hire a full-time in-house legal compliance team or outsource to reputable law firms to ensure that your exchange is legal in all geographies where you will conduct business.
Conclusion
Given the current popularity of crypto exchanges around the world, it is understandable why more and more people are becoming involved in these systems. Digital currency exchange offers excellent opportunities for both those who are new to the market and those who have extensive experience in it. However, depending on the country or currency provided, the market still has a number of limitations, which always implies growth potential.
Developing a high-quality application for your own cryptocurrency exchange company, and collaborating with a reputable cryptocurrency exchange development company is one of the best options that can result in a large profit in a short period of time.
