IA Law Firm Bosnia explores one of the less discussed, yet highly important issues for the crypto industry in Bosnia and Herzegovina: the opening of special-purpose accounts for virtual currency exchange operators.
The legal framework recognizes the need to segregate client funds from the funds of the service provider itself, which in practice is typically achieved through special-purpose accounts. However, challenges arise when legal theory meets banking reality.
Although there is no explicit prohibition on banking relationships with entities providing services related to virtual currencies, a significant number of banks still avoid opening accounts for such purposes. The reasons are generally rooted in internal risk management policies, AML procedures, and a cautious approach toward an industry that is still widely perceived as high-risk. More information on the reasons and potential risks identified by banks can be found here: https://msb.gov.ba/PDF/050220241.pdf
The result is what has become something of an open secret within the market: the legal obligation exists, but the banking product that would allow for its straightforward compliance is often unavailable.
How Do VASPs Address This Challenge?
The most common approach involves a company opening two standard transaction accounts, without specifically disclosing their intended purpose to the bank. Through internal policies, corporate rules, and accounting procedures, the company designates one account exclusively for holding client funds, effectively treating it as a special-purpose account. In this way, the segregation of funds is achieved functionally, even though the bank may not be formally aware of the account’s specific purpose.
Another model involves establishing a separate business unit or organizational division with its own dedicated account through which client funds are managed.
In certain cases, companies choose to establish a separate affiliated legal entity acting as an escrow agent, responsible for holding and administering funds intended for exchange customers. Such an entity maintains separate accounts and, through contractual arrangements, ensures the segregation of customer funds from the exchange’s operational funds.
What all of these models have in common is that they represent attempts to comply with legal requirements in circumstances where the banking market does not offer a solution that would formally and straightforwardly satisfy the needs of the crypto sector.
Of course, these approaches are not without risk. The key question remains whether supervisory authorities will, in a particular case, accept that the purpose of a special-purpose account has effectively been achieved, regardless of its formal designation or status within the banking system.
For this reason, it is crucial that internal policies, contractual documentation, accounting records, and operational procedures clearly demonstrate the segregation of client assets.
Until more consistent banking practices emerge or more precise regulatory solutions are introduced, the market will likely continue operating through these pragmatic structures. While they may not be ideal, they represent the business community’s response to a situation in which complying with legal obligations is often significantly easier on paper than in day-to-day operations.
Why Are More Crypto Projects Choosing the Brčko District?
While virtual asset service providers in Republika Srpska and the Federation of Bosnia and Herzegovina frequently encounter practical challenges when dealing with banks, the Brčko District has, in recent months, emerged as a significantly more predictable and business-friendly regulatory environment.
Practice indicates that the Brčko District Securities Commission adopts a more pragmatic approach to the development of the crypto market and demonstrates a better understanding of the challenges businesses face within the banking sector.
For this reason, an increasing number of domestic and international crypto projects are selecting the Brčko District as the jurisdiction for establishing and licensing their operations.
In addition to its more flexible regulatory approach, the Brčko District also benefits from a unique financial market infrastructure through the Brčko Stock Exchange, further reinforcing its position as a potential regional hub for the development of the fintech, blockchain, and cryptocurrency industries.
This trend demonstrates that the successful development of digital asset markets depends not only on legislation but also on the willingness of institutions to understand the needs of innovative business models and provide regulatory predictability for investors and entrepreneurs.
How Can IA Law Firm Help?
IA Law Firm provides comprehensive legal support to cryptocurrency exchanges, virtual asset service providers (VASPs), blockchain projects, and fintech companies, including:
- Company incorporation and selection of the optimal jurisdiction;
- Preparation of licensing and registration documentation;
- Development of AML/KYC procedures and internal compliance policies;
- Structuring and implementation of client asset protection models;
- Regulatory compliance and communication with competent authorities;
- Legal structuring of crypto and tokenization projects.
If you are planning to launch a cryptocurrency exchange or another VASP project in Bosnia and Herzegovina, contact our team for an individual assessment of the available regulatory and business opportunities:
