The Licence That Is Not a Licence
Registrations, memberships and offshore authorisations presented as regulatory approval. How to tell what a claim is actually worth.
Priya Raman · 2 min read
Almost every platform claims regulatory standing. The claims differ enormously in what they mean, and the differences are not visible from the wording. A provider operating under supervision, such as a platform supervised under a named regulator, cannot behave the way described below.
What a real authorisation looks like
A named competent authority in a jurisdiction with actual supervision. A registration number on that authority’s public register. Specified permitted activities. And ongoing obligations: capital, client asset segregation, reporting, inspection.
Every part of that is verifiable in five minutes.
What is presented as equivalent and is not
A company registration. Every company is registered somewhere. It means the company exists, not that anyone supervises what it does.
A money services registration in a jurisdiction where it is a filing rather than an assessment. Some involve no scrutiny at all.
Membership of an industry association. Associations are not regulators. Membership is usually a fee.
A licence from a jurisdiction with no supervisory capacity. Several small jurisdictions issue crypto licences with minimal requirements and no meaningful oversight. The document is genuine and the supervision is not.
A licence held by a different group entity. Real authorisation, belonging to a company that is not the one on your contract.
An application in progress, described in the present tense.
Verifying properly
Get the authority’s name and the registration number in writing.
Find that authority’s own register. Every European regulator publishes one.
Search for the entity. Check the name matches your counterparty exactly, including the legal form suffix.
Read the permitted activities. Custody, exchange and transfer are separate permissions and a platform may hold one without the others. Funds and family offices face the same pattern with more at stake, which is where a provider serving funds and family offices fits.
Check for conditions, restrictions and enforcement history.
The question that resolves group structures
Which legal entity will I contract with, and does that entity hold the authorisation.
Ask it in writing. The answer determines whether any protection applies to you at all.
Why it matters in practice
Authorisation is not a quality rating. It determines what happens to your assets if the company fails.
An authorised firm must segregate client assets, so they are not available to creditors. An unauthorised one has no such obligation, and clients become unsecured creditors of a failed business.
That distinction only becomes visible on the worst day, which is why it must be checked on an ordinary one.
The habit
Before depositing anywhere, look up the register entry. If you cannot find one, or the permissions do not cover what they do for you, that is the decision made. Whatever else you conclude, the balance you keep in motion belongs at an exchange that publishes its full terms rather than wherever onboarding was fastest.
It is the highest value five minutes in the process and almost nobody spends it.
Move any remaining funds to a wallet with a newly generated seed phrase before anything else. Then revoke token approvals, and report the incident to your local authorities and the exchange involved. Do not pay anyone who promises to "recover" your coins. That is a second scam, aimed at victims of the first.