FATA police published the requirements for the activity of exchanges


FATA Police released the requirements for the operation of cryptocurrency exchanges and brokerages. These requirements have imposed stricter rules on them than what exchanges have been dealing with so far.

According to Mihan Blockchain and citing the payment method, Faraja Police (FATA Police) has published a document titled “Specialized Cyber-Policy Requirements of Cryptocurrency Exchange Agents”. These requirements are among the first outputs of the working group for organizing the exchange of cryptocurrencies, which was formed based on the order of the National Center for Cyberspace on March 27, 2019. These requirements are set in 13 pages and are addressed to brokerages and exchanges that operate in the field of cryptocurrencies.

FATA police has divided the requirements of this document into the following 5 sections:

  1. Management requirements
  2. Riyal-cryptocurrency account requirements
  3. Authentication requirements
  4. Crypto exchange platform requirements
  5. Legal requirements

Important points of this document about cryptocurrencies

Management requirements:

  • One of the interesting points of this document is that a company that has an exchange must be a partnership. A joint venture is one of the seven types of commercial companies, in case of insufficiency and problems, if the company’s property is not enough to pay the company’s debts, each of the partners is responsible for paying all the company’s debts and obligations, and if there is a contract between the partners other than this If it is closed, it will have no legal value.
  • In addition to these requirements, the readers of this document are required to comply with all security attachments, notices and rulings issued by the country’s governing and governmental institutions (police, supervision, banking).
  • The members of the board of directors and the CEO of the company must be classified as “low risk” in the certificate obtained from the validation companies approved by the Central Bank.
  • None of the members of the board of directors and the CEO of the company should have an outstanding debt to the Iranian banking system or have an effective history of bounced checks and a criminal or legal background related to financial and security crimes.
  • Inquiries from the competent law enforcement and security authorities of the country regarding the members of the board of directors and the CEO must be positive and these inquiries must be received before the membership of the company.

Rial-cryptocurrency account requirements:

  • Companies are required to keep all information related to user transaction records for at least 10 years in a secure manner. Keeping users’ information for 10 years is also true for a company that has been dissolved.
  • Information about wallets used with confidentiality, suspicious transactions and bank accounts should be reported to FATA police by exchanges.
  • Providing services in the field of cryptocurrencies to foreign nationals is prohibited in this document.
  • The exchange is not allowed to transfer Riyal amounts between users’ electronic wallets, and Riyal clearing settlements between users are prohibited.
  • The exchange is not allowed to use users’ Rial balance and cryptocurrency in their electronic wallets as a means of payment outside the company’s service network.
  • Any pledge, deposit or confiscation of cryptocurrency and rial assets of users with the exchange is completely prohibited. Of course, all these cases can be provided to them at the request of judicial officers.
  • In case of written, electronic or telephone notification (verified) of information-security institutions, the company is obliged to freeze users’ rial/cryptocurrency balance for 72 working hours, until the issuance of the relevant judicial order is completed.

Authentication requirements:

  • To authenticate users, it is necessary to receive the following information and documents:

    1- Name and surname
    2- National code
    3- Local code of residence + postal code + landline phone number
    4- Mobile phone number
    5- Card number
    6- National card scan
    7- The user’s image + video footage of the user along with the statement of acceptance and confirmation of the terms and conditions, etc., with full observance of all Islamic affairs
    (The following information is related to legal entities and companies:)
    8- Legal information
    9- National ID of the company
    10- The official letter of introduction of the legal representative of the company (go through all the stages of legal personality)
    11- Introducing the legal account information of the bank
    12- Announcement of the official book

Cryptocurrency exchange platform requirements:

  • Exchanges are not allowed to carry out pre-purchase or pre-sale transactions (forward and future transactions), leveraged transactions (futures and margin transactions) and provide services related to said transactions.
  • Compliance with the provisions of this document by cryptocurrency exchange brokers does not in any way constitute the granting of an official and legal activity license.
  • Exchanges should refrain from exchanging and offering cryptocurrencies and tokens that have been declared prohibited by the working group for organizing cryptocurrency exchanges. Exchanges are also not allowed to use any of the cryptocurrencies as a means of payment.
  • Any deceptive advertisements in the direction of promoting cryptocurrencies (domestic or foreign), encouraging and persuading the public to invest in cryptocurrencies (hype), any advertisements and encouraging people to invest in sites that pay large profits in the short term (hype), any information that leads to Encouraging or encouraging the public to buy a specific token or making a market for it, providing any information related to the promotion of cryptocurrencies, providing signals related to the cryptocurrency market, and any internally published cryptocurrency advertisements without a license from the Securities and Exchange Organization are prohibited.

Legal requirements:

  • If, after FATA police evaluations, reviews and warnings, this institution concludes that the activities of exchanges do not comply with the spirit of these requirements, they will ask Shoprak to block their banking portal.
  • Companies active in the field of cryptocurrencies must perform a security test periodically and every 6 months by an evaluation company approved by the FATA police.
  • The company must prepare and provide necessary conditions for intrusive visits as well as periodic audits by FATA police experts.

It should be noted that last week, Iranian exchange managers and cryptocurrency activists held a conference called “Cryptocurrency Regulatory Ups and Downs in Iran” from the “Future of Blockchain Businesses in Iran” series of conferences. Their business had been criticized. To read excerpts from this meeting, go here and here.

In your opinion, how will the requirements and restrictions proposed by FATA police affect the ecosystem of Iranian exchanges and what problems will users face in the meantime? Share your opinion with us below this post.

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