COREDO – EU Legal & Compliance Services Expert legal consulting, financial licensing (EMI, PSP, CASP under MiCA), and AML/CFT compliance across the European Union. Headquartered in Prague, we provide seamless regulatory solutions in Germany, Poland, Lithuania, and all 27 EU member states.
Gregory Lutsenko
10.08.2025 | 6 min read
Updated: 16.10.2026
Under MiCA, the EU regulation on markets in crypto-assets, a firm may provide crypto-asset services in the EU only after a national competent authority has authorised it as a crypto-asset service provider (CASP). Banks, investment firms and certain other regulated institutions can offer these services under a separate MiCA procedure. For crypto startups planning to enter the European market, this is a signal to rethink the approach to registering legal entities in the EU and licensing crypto services.
Why are so many players unprepared for MiCA? What risks does MiCA implementation pose for international crypto companies? Why are even large projects starting to look towards El Salvador, a jurisdiction where cryptocurrency regulation is governed by its own digital assets law and a dedicated regulator, the CNAD? How to choose a strategy to avoid being left out in a market undergoing consolidation and tightening compliance requirements?
In this article, I will share the experience of the COREDO team, which has been supporting international projects in the EU, Asia, and the CIS since 2016, and show how tasks of company registration, obtaining financial licenses, implementing AML for crypto business, and strategic compliance planning are practically solved under MiCA conditions and alternative regimes. MiCA has applied in full since 30 December 2024. Read on to understand how to operate under it, evaluate the advantages of registering a company in El Salvador, or choose the optimal jurisdiction for scaling. Here you will find not only risk analysis but also specific tools for decision-making.
Crypto Asset Regulation under MiCA
Crypto Asset Regulation under MiCA creates a new regulatory environment for working with digital assets in EU countries. Thanks to these rules, a unified system of requirements arises, increasing transparency, protecting investors, and establishing obligations for crypto companies. Let's further examine what specific requirements MiCA imposes on participants in the EU crypto market.
MiCA Requirements for Crypto Companies in the EU
MiCA regulation introduces strict standards for all participants in the crypto asset market in Europe. For companies applying for CASP status, the key requirements are:
- Licensing of crypto services: To enter the EU market, it is required to obtain a license issued by the national competent authority. The process includes a comprehensive review of the corporate structure, sources of funding, and business model.
- AML for crypto business: Implementing anti-money laundering and counter-terrorism financing (AML/CFT) procedures becomes mandatory. Companies must develop and maintain internal CDD (customer Due Diligence) policies, identify ultimate beneficiaries, implement KYC procedures, and ensure transparency of operations.
- Whitepaper for tokens: A public offer of crypto-assets generally requires a MiCA white paper, which is notified to the national competent authority at least 20 working days before publication rather than approved. Some offers are exempt, for example a utility token giving access to a product or service that already exists, while issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs) follow separate rules.
- Corporate governance: MiCA requires management body members of good repute with the right knowledge and experience, and qualifying shareholders of good repute. CASPs also need effective policies, competent staff, a business continuity policy, AML risk-assessment procedures and five-year records of their services and transactions.
- Travel Rule: Alongside MiCA, Regulation (EU) 2023/1113 has applied since 30 December 2024. Where the CASP, or the intermediary CASP, of the originator or of the beneficiary has its registered office in the EU, a transfer of crypto-assets must carry information on both parties. This applies whether the transfer is domestic or cross-border. Transfers between CASPs acting on their own behalf and person-to-person transfers without a CASP are excluded, and transfers involving self-hosted wallets require additional checks.
The practice of COREDO shows that preparing for licensing under MiCA requires not only a deep understanding of regulatory requirements but also restructuring internal processes: from developing compliance policies to integrating automated transaction monitoring systems.
MiCA Implementation: Challenges and Risks
MiCA regulation: is not just a set of formal requirements. For most companies, the key challenge becomes the compliance cost: costs of audits, legal support, AML/KYC implementation, operation monitoring automation, and whitepaper preparation. According to COREDO's estimates, for an average crypto service in the EU, the cost of full MiCA compliance implementation can reach 250-500 thousand euros in the first year, with market entry timelines ranging from 6 to 18 months.
Special attention should be paid to risks for small businesses. High costs and complexity of procedures lead to market consolidation: small players are forced to either merge or leave the market. This is confirmed by COREDO's practice when supporting startups in the Czech Republic and Estonia, where many projects abandon licensing in favor of alternative jurisdictions or pivot models.
Among the long-term consequences of the MiCA regulation, there is an increase in operational costs, stricter corporate governance requirements, and the risk of small players exiting the market. For entrepreneurs, this means the need for strategic compliance planning and evaluating the ROI of MiCA implementation.
MiCA and AML Rules for Crypto Business
MiCA regulation integrates with EU directives on AML/CFT, making anti-money laundering and counter-terrorism financing a central element of cryptocurrency regulation in Europe. For CASPs and other market participants, this means:
- Mandatory implementation of customer due diligence (CDD) procedures, continuous transaction monitoring, and identifying suspicious activities.
- Implementation of the Travel Rule of Regulation (EU) 2023/1113 for transfers of crypto-assets within its scope, both domestic and cross-border.
- Increased requirements for transparency of operations and investor protection.
The COREDO team has implemented projects for introducing automated AML systems for crypto exchanges in the EU, which allowed clients not only to comply with MiCA requirements but also to reduce the risk of account blocking and fines from regulators.
Cryptobusiness Regulation in El Salvador
Cryptobusiness Regulation in El Salvador is built on the Digital Assets Issuance Law (LEAD) and its regulations. The National Commission for Digital Assets (CNAD) registers digital asset service providers, and the anti-money laundering rules of the Financial Investigation Unit (UIF) apply to them. This is reflected in both licensing requirements and AML regulation for market participants.
Licensing and AML in El Salvador
El Salvador regulates crypto services under its own framework rather than MiCA. The CNAD (National Commission for Digital Assets) registers digital asset service providers (DASPs) under the Digital Assets Issuance Law: pre-registration in two phases is followed by definitive registration. Once the definitive application is filed, the CNAD has up to 20 business days to issue a favourable or unfavourable resolution. Within that period it may instead notify that the file is incomplete, and the applicant then has 10 business days to complete it. The CNAD publishes no total duration for the whole process. Applicants must provide, among other things:
- Corporate documents, a recent list of shareholders, an organisational chart and audited financial statements for the last three years, or for the years the company has existed.
- A business plan and a detailed description of the services, the digital assets to be offered and the technology used, including KYC/KYB and transaction-monitoring tools.
- AML/CFT manuals under the UIF instructions, including a risk matrix and due diligence and Travel Rule policies, plus board-appointed principal and alternate compliance officers and a CISO with direct board access.
A real case from COREDO: a client from Singapore completed legal entity registration and obtained a VASP license in 6 weeks, integrating KYC/AML procedures with the help of a local provider. This approach allows for the swift launch of a business and entering international markets.
Company Registration in El Salvador: Pros and Cons
El Salvador has a dedicated digital assets law and regulator. According to the CNAD, registered providers also enjoy the tax benefits of Article 36 of the LEAD from the notification of their definitive registration number. Registration still requires detailed AML/CFT, governance and technology documentation. However, there are also limitations:
- The jurisdiction's reputation still lags behind the EU and the UK, which can complicate access to banking services in Europe.
- For cross-border operations and working with institutional investors, additional legal support will be required.
- Risks for small and medium businesses are associated with the uncertainty of international recognition of licenses and the need for integration with global AML standards.
COREDO's experience shows that for companies focused on rapid scaling and innovations, El Salvador becomes a real alternative to the EU, provided there is competent legal support.
Comparison of Jurisdictions: EU, Asia, Africa
For international crypto projects, choosing a jurisdiction is a balance between compliance requirements, market entry speed, and opportunities for innovations. In Asia (Singapore, Hong Kong), digital assets regulation is based on transparency and technological neutrality principles, but it requires local presence and KYC/AML implementation at a global standard level.
In Africa (Mauritius, South Africa), there is regulatory flexibility and innovation support, but availability of banking services and international recognition of licenses are limited. COREDO practice confirms: for crypto startups targeting the global market, diversification of corporate structures is optimal - registering a parent company in the EU or Singapore with subsidiaries in El Salvador or Africa.
MiCA or Regulation in El Salvador – What to Choose?
| Criterion | MiCA (EU) | El Salvador |
|---|---|---|
| License Requirements | Strict, lengthy process, high cost | Registration with the CNAD: two-phase pre-registration, then definitive registration |
| AML/CTF | EU AML rules and the Travel Rule (Regulation 2023/1113), supervised by national authorities | UIF AML/CFT rules, including a Travel Rule policy and compliance officers |
| Whitepaper Requirements | Formalized, mandatory disclosure of information | Public offers: a relevant-information document reviewed by a certifier |
| Corporate Governance | Formalized: suitable management, effective policies, business continuity, records | Board-appointed compliance officers and CISO, risk management framework |
| Market Entry Timelines | 6-18 months | 1-3 months |
This comparative analysis, based on COREDO cases, allows entrepreneurs to evaluate not only direct costs and timelines but also strategic risks related to jurisdiction choice.
Choice of Jurisdiction and Preparation for MiCA
Choice of jurisdiction and preparation for MiCA becomes one of the key stages for crypto projects planning to operate in the European Union. The legislation establishes unified requirements for issuers and service providers, so a competent choice of country of registration and early preparation for the new MiCA standards determines how quickly and efficiently the business will adapt to the new rules.
MiCA applies in full, and the transitional period for existing providers ended on 1 July 2026 at the latest. It is important to determine specific steps for successful integration of MiCA requirements in advance.
MiCA Implementation: What Needs to Be Done?
COREDO's experience shows that successful adaptation to MiCA regulation requires a phased approach:
- Conduct an internal audit of corporate structures, business processes, and existing compliance policies.
- Develop a MiCA implementation strategy: identify key risk zones, assess compliance costs, plan AML/KYC automation.
- Prepare whitepaper and documentation in accordance with MiCA requirements for the business.
- Establish partnerships with regulators and professional associations for quick information exchange and obtaining clarifications on complex issues.
The COREDO team supports clients at all stages, from initial risk assessment to integration of automated compliance solutions.
Thus, after implementing all stages, consideration of alternative jurisdictions for business development and scaling becomes relevant.
Alternative Jurisdictions for Business
Deciding on jurisdiction choice should be based on an analysis of the business model, target markets, and compliance readiness. Alternative jurisdictions (El Salvador, Singapore, Mauritius) become optimal if:
- Your business model requires quick market entry and cost minimization.
- The project is focused on innovations and flexibility, not on institutional investors in the EU.
- There is a need to diversify corporate structures and reduce operational costs.
COREDO's practice shows that for many crypto startups, a multi-jurisdictional presence strategy is effective: registration of a legal entity in the EU to work with European investors and parallel licensing in El Salvador or Asia for global operations.
How to Evaluate Compliance ROI?
Evaluating MiCA compliance ROI involves not only analyzing direct costs but also forecasting long-term consequences for companies:
- Operational expenses: MiCA compliance implementation increases costs by 20-40% in the first year but reduces the risk of fines and blockages.
- Long-term planning: Companies investing in compliance automation gain a competitive advantage by reducing costs and speeding up processes.
- Innovation and market diversification: A multi-jurisdictional presence strategy allows maintaining flexibility and adapting to regulatory changes.
COREDO's recommendation: integrate compliance ROI evaluation into strategic planning and use automation tools to minimize costs.
Conclusions and Recommendations for Business
Checklist for choosing a jurisdiction:
- Evaluate licensing and compliance requirements in each jurisdiction.
- Analyze access to banking services and jurisdiction reputation.
- Calculate timelines and costs for legal entity registration and obtaining a license.
- Consider risks for small businesses and opportunities for innovation.
Algorithm for preparing for MiCA:
- Internal audit of processes and structures.
- Development of compliance strategy and automation of AML/KYC.
- Preparation of whitepapers and information disclosure according to MiCA.
- Interaction with regulators and professional associations.
Tips for reducing compliance costs:
- Utilize automated solutions for transaction monitoring and CDD.
- Engage external experts for audits and process optimization.
- Diversify corporate structures to reduce operational costs.
Recommendations for jurisdiction diversification:
- Consider a multi-jurisdictional model with registration in the EU, El Salvador, and Asia.
- Utilize the advantages of each jurisdiction for tax optimization and market access.
Key Questions for Entrepreneurs
What strategic risks does MiCA implementation pose for international crypto companies?
The main risks relate to rising compliance costs, tightening of AML/KYC, the need for comprehensive audits of corporate structures, and the risk of small players exiting the market. COREDO's solution includes strategic compliance planning and jurisdiction diversification.
How does MiCA affect the costs and timelines for market entry in the EU for crypto business?
Licensing timelines increase to 6–18 months, compliance costs can amount to up to 500 thousand euros in the first year. COREDO's practice: process automation and document preparation shorten timelines and costs.
What are the advantages and disadvantages of regulation in El Salvador compared to MiCA?
El Salvador offers a dedicated digital assets law and regulator and, according to the CNAD, tax benefits under Article 36 of the LEAD for registered providers. Registration still requires full AML/CFT documentation and does not authorise crypto-asset services in the EU under MiCA, and access to banking services and international investors can be more difficult. For startups: it is an opportunity to quickly enter the market, for large-scale projects - a tool for diversification.
How to ensure compliance with the Travel Rule and AML requirements within MiCA?
Implementation of automated solutions for transaction monitoring, applying the Travel Rule of Regulation (EU) 2023/1113 to transfers within its scope, and staff training are key steps implemented by the COREDO team.
What new requirements for whitepapers and information disclosure does MiCA impose?
A whitepaper must include a full token description, investor protection mechanisms, risks, fund usage order, and MiCA regulation compliance. A solution developed at COREDO involves comprehensive documentation preparation in accordance with ESMA requirements.
How does MiCA impact corporate governance of crypto companies?
MiCA requires a suitable management body and qualifying shareholders, effective policies and procedures, business continuity arrangements and full records of services and transactions, which increases investor trust but also increases administrative burden. COREDO's experience involves implementing flexible corporate governance models considering business specifics.
If you need to choose a jurisdiction, prepare a company for MiCA regulation, or minimize risks of implementing new standards, the COREDO team is ready to offer comprehensive solutions based on international experience and deep market knowledge.