A crypto business can generate a decent income, especially in countries where it has legal status. The EU is also among them. All that remains is to determine how to legally work with cryptocurrency in Europe and develop a plan for establishing this type of company.

 

Within the EU jurisdiction, legislation clearly defines crypto and already uses clear mechanisms for regulating this type of activity. Today, you will learn about the specifics of working with crypto assets in Europe.

 

How Is Cryptocurrency Regulated in the European Union?

MiCA Regulation (Markets in Crypto-Assets) is a relatively new regulation that establishes a unified legal framework governing the activities of crypto companies, platforms, and exchanges. Here is what MiCA covers:

 

  1. Authorization and “passporting” (CASP License). A crypto company providing MiCA-regulated services in the EU is, in most cases, required to obtain CASP authorization.
  2. Prudential and capital requirements. Depending on the CASP category: €50,000, €125,000, and €150,000. At the same time, the amount of prudential safeguards must not be lower than the greater of two amounts: the minimum capital or 25% of fixed overhead expenses for the previous year.
  3. Corporate governance and personnel requirements. Company management and board members undergo mandatory “fit and proper” checks for professional suitability and the absence of criminal convictions. Businesses are required to implement written policies on risk management, conflict-of-interest resolution, and business continuity plans.
  4. Consumer protection and disclosure. MiCA establishes various disclosure requirements and requirements for preparing a crypto-asset white paper depending on the category of the crypto asset and its offering model. Client funds and crypto assets must be protected and segregated from the CASP’s own assets in accordance with MiCA requirements.
  5. Anti-money laundering (AML/CFT) and operational resilience. Under the DORA Regulation, companies must ensure cybersecurity, including the implementation of IT security systems, incident response plans, and regular system testing.
  6. Enhanced supervision of major players. MiCA provides criteria under which certain ARTs and EMTs may be classified as significant. Additional requirements and enhanced supervision apply to such tokens.

 

MiCA also applies to companies that provide regulated crypto services in the EU, regardless of the country in which they are registered. The “reverse solicitation” exception applies only when servicing is initiated by the client and cannot be carried out systematically.

 

What Types of Crypto Businesses Can Be Operated in Europe?

To understand how to legally work with cryptocurrency in the EU, you should first learn about the types of businesses that fall under the concept of a “crypto business.” The key ones include:

 

Crypto Exchanges Platforms for buying/selling cryptocurrencies. They fall under CASP status under MiCA. A license, AML/KYC, and the right to passport services across the EU are required.
Custodial Services Storage of clients’ crypto assets. They are required to ensure the protection of funds, reporting, and compliance with MiCA.
Token Issuers Issuance of utility tokens, ARTs (asset-referenced tokens), and EMTs (e-money tokens). MiCA establishes specific requirements for issuance and disclosure.
Exchange Services The exchange of crypto assets for funds or other crypto assets constitutes a regulated CASP service when MiCA conditions are met.
Payment Solutions Integration of cryptocurrencies into e-commerce and fintech. Depending on the service model, they may fall under CASP regulation and/or EMI/PI requirements.
DeFi Platforms The applicability of MiCA to DeFi depends on the project’s structure and degree of decentralization. Fully decentralized services without an intermediary may fall outside the scope of MiCA.
DLT Pilot Regime An experimental EU regime for tokenized securities. It allows exchanges and securities settlement systems to be launched on blockchain technology.
NFT Marketplaces Sale of unique tokens. Certain unique and non-fungible crypto assets are excluded from the scope of MiCA.
Mining and Staking Legalized as a business model in a number of EU countries. They require tax reporting and energy regulation.

 

Is a Permit Required to Work with Cryptocurrency in the EU?

CASP licensing in Europe is necessary if you intend to provide MiCA-regulated crypto services in the EU. CASP authorization establishes the requirements and rules for providers of such services.

 

At the same time, it is necessary to assess the characteristics and economic function of the specific asset. This determines whether the activity falls under MiCA requirements and which rules apply to it.

 

How to Start Working with Cryptocurrency in Europe

The process for legalizing activities is quite straightforward. You need to determine the direction of your activities, ensure compliance, and establish a company with the appropriate profile. Next, you need to undergo the regulator’s review, comply with the requirements, and open special bank accounts.

 

However, not all entrepreneurs manage to complete the procedure successfully on the first attempt. Therefore, you may need the assistance of Lawrange experts, especially at the stage of preliminary document preparation, and then when opening an account and undergoing compliance procedures.

 

Let us take a closer look at the legalization steps that will help you understand how to legally engage in cryptocurrency activities in the EU.

 

Determine the Crypto Business Model and Activity Requirements

First of all, you need to clearly determine which type of crypto services you plan to provide:

 

  • exchange;
  • custodial storage;
  • trading platform;
  • consulting;
  • transfers.

 

The minimum capital requirements and the scope of mandatory reporting directly depend on this. It is also important to determine whether you will work with stablecoins. Separate, stricter rules for asset reserves and disclosure apply to them.

 

Choose a Jurisdiction and Register a Company

You need to choose an EU country in which to register your company, taking into account differences in national approaches to taxation, fees, and the speed of application processing.

 

The company must meet the requirements regarding its place of establishment, effective management, and organizational structure depending on the chosen jurisdiction and business model.

 

After registering the legal entity, you will be able to apply for a CASP license. This license will subsequently give you the right to operate throughout the EU market through the passporting mechanism.

 

Prepare Legal and Compliance Documentation

You will need to develop and approve a complete package of internal policies:

 

  • an AML/CFT program with KYC procedures;
  • a risk management policy;
  • rules for resolving conflicts of interest;
  • a business continuity plan.

 

You will also need to prepare a White Paper for crypto-assets if required by MiCA. The documentation must comply with the MiCA and national regulator requirements established for the content, form, and language of the documents.

 

Obtain the Required Authorization

You should submit a complete package of documents to the national regulatory authority of the selected country. You must also undergo a “fit and proper” assessment for members of the board of directors and key executives.

 

When reviewing the application, the regulator may request additional clarifications or require amendments to internal policies. Therefore, you need to be prepared for dialogue and prompt adjustments. The time required to obtain a license may vary, but on average, the process takes several months.

 

Launch Operations and Comply with Regulatory Requirements

After obtaining the license, you can launch your operations. However, you are still required to strictly comply with operational requirements:

 

  • segregation of client funds;
  • quarterly capital reporting;
  • regular disclosure of information to clients.

 

You will also need to set up transaction monitoring systems to comply with AML/CFT requirements and ensure compliance with the DORA Regulation on cybersecurity.

 

Finally, remember that the regulator conducts periodic inspections, and violations may result in serious fines, up to and including the revocation of the license.

 

How to Choose a European Country for a Crypto Business

Where to obtain a CASP crypto license in 2026? Today, Germany is the absolute leader in terms of the number of licenses issued. It has a strong financial ecosystem and an experienced regulator, BaFin.

Order a consultation

 

For startups seeking a balance between cost and speed, the Baltic and Eastern European countries are attractive:

 

  • Lithuania offers a digitalized process taking 3–6 months and a preferential tax regime for fintech companies.
  • Bulgaria attracts businesses with the lowest corporate tax rate in the EU, at 10%.

 

Contact Lawrange experts for a detailed consultation and to choose jurisdictions that meet your expectations.

 

What Requirements Must a Crypto Business Comply with in the EU?

Do you know how to legally work with cryptocurrency in Europe? You need to adhere to strict requirements and procedures. Namely:

 

  • CASP license. Authorization as a CASP is required to provide regulated MiCA services in the EU. The transitional period for previously operating providers ended no later than July 1, 2026.
  • Minimum capital. From €50,000 to €150,000, depending on the type of services.
  • Sufficient own funds. Prudential safeguards must not be lower than the greater of two amounts: the minimum capital or 25% of fixed overhead expenses for the previous year.
  • “Fit and proper” assessment of management. Directors and key managers undergo a suitability test and a check for the absence of criminal convictions.
  • Corporate governance. Written policies on risks, conflicts of interest, and a business continuity plan.
  • White Paper. Publication and notification to the regulator of a detailed description of the crypto asset (if you are an issuer).
  • Asset segregation. Keeping client funds separate from the company’s own funds.
  • AML/CFT. Mandatory KYC procedures, transaction monitoring, sanctions screening, and compliance with the Travel Rule.
  • Cybersecurity (DORA). Implementation of IT security systems, incident response plans, and regular testing.
  • Regulatory reporting. Regular submission of data on capital, transactions, and compliance with requirements.
  • Transparency for clients. Clear terms of service, a ban on misleading marketing materials, and a complaints-handling procedure.

 

Violation of any of the above requirements may result in the revocation of the license and other sanctions.

 

Taxation of Crypto Businesses in Europe

Let us consider the key tax rates for crypto assets in EU countries:

 

Crypto Exchanges Taxes depend on the chosen jurisdiction and business structure. Corporate tax, VAT, taxation of crypto-asset transactions, and tax reporting requirements must be assessed separately.
Custodial Services Income is subject to corporate tax; storage expenses are accounted for as operating expenses.
Token Issuers Profit from token sales is subject to corporate tax; VAT may apply to the issuance of utility tokens.
DeFi Platforms Income from fees and liquidity is subject to corporate tax; staking is treated as investment income.
NFT Marketplaces NFT sales are subject to VAT; company income is subject to corporate tax.
Mining and Staking Income is recognized as taxable; in some countries (Germany, France), an additional electricity tax may apply.

 

Tax rules and rates vary depending on the jurisdiction and business structure.

 

What Happens If You Work with Cryptocurrency in the EU Without the Required Authorizations?

If the MiCA Regulation is violated, the consequences will not be long in coming. For example:

 

No CASP License Fines of up to millions of euros, a ban on activities, and account blocking.
AML/KYC Violations Criminal liability, revocation of registration, and financial police investigations.
Illegal Cryptocurrency Exchange Confiscation of funds, closure of the platform, and a ban on obtaining a license again.
Token Issuance Without Registration Recognition of the issuance as illegal, refunds to investors, and legal claims.
Violation of Tax Rules Additional tax assessments, fines, and criminal proceedings for tax evasion.
Illegal Mining/Staking Confiscation of equipment and fines for illegal energy consumption.

 

It is important to comply with the law and seek legal support from experts.

 

How Lawrange Helps Legally Launch a Crypto Business in Europe

Do you know how to legally operate a cryptocurrency business in the EU? Simply entrust the legal matters to the Lawrange team. With us, you will receive:

 

  • Comprehensive audit and strategy. Analysis of your business model taking into account MiCA requirements and adaptation of the structure to European regulations.
  • Assistance in choosing a jurisdiction. Comparison of the requirements of Lithuania, Estonia, the Czech Republic, and other countries to find the optimal balance of speed, cost, and reliability.
  • Development of a complete package of documents. Preparation of AML/KYC policies, internal compliance procedures, business plans, and descriptions of technological processes for the regulator.
  • CASP license application support. Communication with financial regulators, coordination of the application submission, and prompt responses to regulatory requests.
  • Legal support at all stages. From company registration and opening bank accounts to asset tokenization and token listing.

 

Ready to start your project? Contact us for a consultation and find out how to legally operate a crypto business in Europe!

 

Conclusions

Cryptocurrency in the EU is regulated by MiCA, and a CASP license may be required to operate in this niche. After obtaining authorization, you must comply with the law and provide services within the regulatory requirements. At any stage of establishing and subsequently operating a business, you need to follow clear bureaucratic and legal procedures. Violations are punishable by license revocation or other sanctions.

 

Want to work without problems? Choose the Lawrange team as your legal partner!

 

FAQ

Is a license required for a crypto business in the EU?

Yes, most crypto services (exchange, custodial storage, management, consulting, etc.) provided to clients in the EU require a mandatory CASP (Crypto-Asset Service Provider) license.

 

Which European country is best for opening a crypto business?

There is no single best jurisdiction; the choice depends on your business model, type of activity, and other factors.

 

Can I work with clients from different EU countries?

After authorization in one Member State, a CASP can use the passporting mechanism to provide regulated services in other Member States, subject to the established notification procedure.

 

Is AML/KYC compliance required when working with cryptocurrency?

Yes. Upon obtaining a CASP license, you automatically become an obliged entity under AML/CFT requirements. You must also implement a comprehensive program including customer verification (KYC), transaction monitoring, sanctions screening, and compliance with the Travel Rule.

 

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