Exchange platform Birake have recently announced that they have been granted a Full Regulatory License for Cryptocurrency Trading. The announcement released on March 21 links to an entry on the Estonian Register of Economic Activities, which confirms two operating licences have been granted:

-Providing services of exchanging a virtual currency against a fiat currency (FVR000574)
-Providing a virtual currency wallet service (FRK000487).

Both licenses name Birake OÜ as the registered business, or “entrepreneur” with registry code 14612468 and operating from an address. Initial operating licence applications are shown to have been made in December 2018 by Ilja Nikiforov, a Lawyer from the Estonian Accounting and Consulting Firm, Eesti Firma.

The final ratified licences were published on 22 March 2019 and confirm Bogdan Mavrodin, Founder & CEO of Birake.com as the responsible person for Birake’s exchange and wallet licences. This coincided with the team’s early announcement the previous day:

According to Eesti Firma’s website, the provision of virtual currency wallet and virtual currency exchange services both became permissible when the Money Laundering and Terrorist Financing Prevention Act was passed in Estonia.

Under the Estonian regulations, Due Diligence Measures are required upon establishment of a business relationship.  Birake have confirmed that for those purchasing a white label platform, KYC measures are required.

Other Grounds for Application of Due Diligence Measures quoted within the Estonian regulations include:

Upon making or mediating occasional transactions outside a business relationship where a cash payment of over €15,000 euros or an equal amount in another currency is made, regardless of whether the financial obligation is performed in the transaction in a lump sum or in several related payments over a period of up to one year
At least every time a payment of over €10,000 euros or an equal sum in another currency is made to or by the trader in cash, regardless of whether the pecuniary obligation is performed in a lump sum or by way of several linked payments over a period of up to one year.

Whilst there are other triggers for Due Diligence measures within the regulations; credit, debit, money remittance and transfers as defined by EU Regulations come into force at a figure much lower than above of only €1000 within one month. Trading or depositing Fiat Currency however is not something available on the Birake platform and, at least for the time being, traders are not required to go through a KYC process before they can open an account with Birake.

Based on the information available at the time of writing, the Birake exchange is licensed, registered and regulated. Any whitelabel exchanges originating from Birake are first required to register themselves with Birake.  Traders operating legally and at relatively lower volumes have the freedom to start placing buy and sell orders without first having to go through an intrusive KYC process.

Birake have included provisions for KYC within their terms and conditions which would indicate they are prepared to implement KYC should the need arise but as matters stand, using some apparently “light touch regulation” available to them, it does look like Birake have seized the opportunity to provide something that offers traders the best of both worlds:  Know Your Exchange instead of Know Your Customer. Long may that continue.