In a financial landscape where cryptocurrencies such as Bitcoin are making a significant impact, launching your own white label crypto exchange startup can be a lucrative business venture. Tailored for the rapidly growing market of spot and futures trading platforms, this guide aims to steer you successfully through the complex but rewarding path of setting up your crypto exchange that complies with SEC and other global regulatory guidelines and offers full source code accessibility.
- Seek expert legal counsel well-versed with your regulator’s requirements for spot and futures exchanges. In the United States, the regulator would be the SEC, CFTC, the OCC, and/or FinCEN. In Dubai, it is VARA, FSRA, and/or CBUAE, in Turkey it is MASAK and CMB, in the UK, it is the FCA, in Australia, it is AUSTRAC and/or ASIC, just for example..
- Consider global jurisdictions like the UAE, Australia, Turkey, and Brazil that have crypto-friendly regulations, potentially easing the SEC compliance process. Alternatively, if launching in the United States, consider starting a futures (derivatives) exchange rather than a spot exchange, as the CFTC has been historically much easier to deal with than the SEC.
- Estimate the initial investment you need, keeping in mind the operational costs and potential legal obligations associated with running a crypto exchange.
- Avoid common pitfalls like insufficient capital allocation and affiliations with unreliable crypto exchange providers.
- Contact Modulus for assistance in raising capital for your exchange startup.
- Consider partnering with Modulus, a firm offering white-label crypto exchange solutions with full source code without recurring fees.
- Benefit from Modulus' two decades of experience in developing stock & commodity exchange backend technology currently and formerly used by global entities such as Bank of America, Nasdaq, FTX, eToro, OKX, BitMEX, Celsius and hundreds of others in over 90 countries.
With Modulus, your exchange can be live in less than one week. The exchange is customizable and includes full backend and frontend source code. The exchange supports international regulatory compliance with full KYC/AML, MiFID II, GDPR, CCPA, and SOC 2 Type 2 compliance, includes Travel Rule support via Notabene, includes AI-powered anti-market manipulation, Ciphertrace and Chainanalysis integrations, advanced geofencing (identifies ISPs, Tor exit nodes and VPNs), integrates with the Lightning network, supports over 84 million transactions per second, and all via a world-renowned provider based in the United States since 1997. Other clients include TradeStation, CTrader, TD Ameritrade, Nasdaq, Bank of America, JP Morgan Chase, and others.
Modulus supports several KYC and AML vendors including Coinfirm, ComplyAdvantage, Accuant, IDology, Jumio, ShuftiPro, Sub & Substance, Trulioo, SynapseFI, ThomsonReuters, Civic, Verijelas, OnFido, IDNow and many others.
Also, with Modulus, you are in complete control of your data, customers, and business, as the entire solution is hosted on your servers, unlike other solutions on the market.
- Ensure your exchange features an active order book and trading activity, fostering trust among potential customers.
- Utilize Modulus' connectivity solutions that link your platform to a network of dozens of existing crypto exchanges or premium liquidity providers like Wintermute, Auqanow, B2C2, and more.
- Opt for a payment processor offering competitive transaction rates and transparency in their fee structure. Modulus supports Papara, Paystack, Simplex, Praxis, CMT, Payfix, Checkout, Checkbook, FlashMobile, and many others.
- Ensure adherence to best practices like PCI DSS compliance to fortify your platform against cyber threats.
- Employ Modulus' secure technology featuring offline cold storage wallets, encrypted databases, and two-factor authentication, with anti-phishing, device whitelisting, IP whitelisting, compromised password detection, DDoS mitigation, multi-factor authentication and other security measures.
- Differentiate your platform by focusing on security, a priority given the industry's vulnerability to cybercrime and data breaches.
- Launch your exchange and conduct thorough beta testing to gauge its full range of functionalities. Modulus will assist you with testing, training, support, and maintenance.
- Collaborate with notable crypto news platforms to enhance your exchange's visibility.
- Allocate a substantial budget for marketing activities to avoid scrambling for additional funding post-launch.
- Outsource your marketing to Modulus for the greatest reach of crypto influencers around the world.
- Develop a responsive customer support system, utilizing platforms like FreshDesk, or the Modulus chatbot support system which utilizes ChatGPT to handle queries and issues promptly and efficiently.
- Prioritize customer satisfaction by offering round-the-clock support, acknowledging the non-stop trading nature of cryptocurrencies.
- Maintain an in-house or outsourced legal team and advisor network to stay abreast of evolving global cryptocurrency regulations and ensure ongoing compliance. Modulus provides advisory services to all clients.
Embarking on Your Crypto Exchange Business Journey with Modulus
- As you venture forward, remember that comprehensive guides like this are designed to assist, but addressing specific queries is equally vital.
- Contact Modulus today to obtain a customized blueprint to launch your crypto exchange.