Overview of Cryptocurrency Licensing in New Zealand
New Zealand's well-developed digital ecosystem thrives due to its transparent investment climate and robust legal framework. The Financial Markets Authority (FMA) classifies cryptocurrency transactions as securities, bringing them under the purview of two key laws:
- Financial Markets Act
- Financial Service Providers Act
Since cryptocurrencies are treated as securities, a dedicated cryptocurrency license isn’t required. Instead, businesses must obtain a standard financial services license to operate legally. The FMA emphasizes that even if a digital asset doesn’t fully align with traditional securities, it remains subject to regulatory oversight.
Licensing Requirements for Cryptocurrency Businesses
Cryptocurrency Exchange License
While New Zealand doesn’t issue a standalone cryptocurrency exchange license, exchanges must comply with securities regulations. The FMA enforces:
- Dispute Resolution: Proactive mediation between consumers and service providers.
- Fraud Prevention: Public alerts about suspicious entities and license revocations for non-compliant operators.
- Financial Services Compliance: Activities like asset issuance, payment processing, and custody services fall under regulated financial services.
Operational License for Cryptocurrency Firms
Initial Coin Offerings (ICOs) are treated similarly to securities offerings, requiring standard licensing. Key requirements include:
✅ Local Registration: Establish a legal entity and headquarters in New Zealand.
✅ FMC Act Adherence: Comply with the Financial Markets Conduct Act.
✅ Fee Payments: Pay taxes and fees for each service category.
✅ Anti-Fraud Measures: Prohibit misleading claims, including unverified price predictions.
Note: The FMA mandates that all published financial forecasts be based on verifiable data.
Anti-Money Laundering (AML) and Compliance
New Zealand enforces strict AML protocols aligned with global standards. Before licensing, the FMA evaluates:
- Business model and financial activities.
- Target market size and client base.
- Internal control systems and regulatory technologies.
Historical Cases: Claims arising before April 1, 2014, fall under the jurisdiction of the Commerce Commission (predecessor to the FMA).
Benefits of Obtaining a License
Securing a license grants businesses:
🔹 Enhanced credibility in global markets.
🔹 Increased customer trust due to New Zealand’s strong regulatory reputation.
🔹 Access to a growing cryptocurrency market with clear legal guidelines.
FAQs
1. Do I need a separate license to trade cryptocurrencies in New Zealand?
No—cryptocurrencies are regulated under existing securities laws. Businesses need a standard financial services license.
2. What are the penalties for non-compliance?
The FMA can revoke licenses, impose fines, or publish warnings about fraudulent entities.
3. How long does the licensing process take?
Timelines vary based on business complexity, but applicants should expect thorough scrutiny of their operational and compliance frameworks.
👉 Learn more about OKX’s global compliance standards