The Different Types Of Crypto License And How They Protect Consumers

The rising importance of the digital assets industry has led to new businesses popping up all over the world, but how are they regulated to protect consumers? By looking at some of the most common crypto licenses, we can see how they’re helping to make dealing with cryptos easier and

IMAGE: UNSPLASH

Crypto Exchange And Wallet Licenses Protect Consumer Funds

Centralised crypto exchanges have become a hugely important part of the industry, as they give users a place to safely convert fiat to crypto and vice versa, using bank cards or other simple methods of moving funds.

The top platforms handle a massive volume of data daily and need to prove that they’re safe to use.

Obtaining a crypto license from a regulatory authority like those in Costa Rica or Malta confirms that an exchange is professionally run. These well-regarded authorities ensure that their license holders are properly registered and have completed all the necessary paperwork.

They typically require that their exchanges carry out KYC (know your customer) and anti-money laundering checks, as well as put in place strong anti-fraud measures to protect customer funds.

Crypto wallets and exchanges can seem to offer similar services, but wallets are generally used more for long-term storage of digital assets.

The requirements are along the same lines, though, as both types of operators need to verify the source of the funds and then make sure they’re well-protected at all times.

Crypto Mining Services Need To Manage Their Environmental Impact

Mining services have boomed in recent years, as the rising price of Bitcoin, in particular, has caused more people to look into how to get started.

While some tokens can still be mined on regular home PCs, BTC mining has largely moved into the hands of huge companies like Core Scientific, which is the subject of a takeover bid from CoreWeave, having previously rejected a $1 billion cash offer.

These companies set up huge mining centres where they large numbers of rigs working round the clock.

Crypto mining licenses are used as a way of regulating this industry and ensuring good practices. The requirements vary greatly between jurisdictions, with some encouraging start-ups to locate there with low fees and tax rates.

However, energy use and environmental impact are common issues that are dealt with in the regulations across different jurisdictions.

They also need to comply with anti-money laundering regulations and KYC, protecting the customers who deal with them to buy the tokens they mine or who use other services like cloud mining

If we look at the example of the UK, crypto mining is legal, but tax needs to be paid on the benefits gained from this activity.

Companies like Argo Blockchain are based here, while BTCMining Limited was closed earlier in 2025 after a series of complaints from the public that it wasn’t carrying out the services it advertised.

Argo Blockchain is looking to get the London Stock Exchange listing under the ARB ticker restored after suspension, showing that these companies are also subject to relevant stock market rules.

The way that crypto licenses are issued brings a great deal of stability and confidence to the market.

In such a fast-moving and volatile industry, the need for tight regulations and a good sense of control has meant that the best licenses have gained widespread acceptance and helped raise consumer confidence levels.

Disclaimer: The above references an opinion of the author and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. Invest responsibly and never invest more than you can afford to lose.