According to European regulators, the fine for unlicensed crypto services in several EU countries already reaches 5% of annual turnover or a fixed threshold of several million euros, and in certain cases an additional double profit penalty is applied — recovery in the double amount of the profit extracted. In COREDO we have seen how such sanctions turned a promising crypto business into a crisis case after just one round of inspection.
When a crypto license is needed
MiCA: Crypto project legally operating without a CASP in the EU
EU Regulation 2023/1114 (MiCA regulation) introduces common rules for CASP services (Crypto‑Asset Service Providers) across the Union: from custodial storage to managing trading platforms and crypto‑to‑crypto or crypto‑to‑fiat exchange. For an entrepreneur the key question is simple: do I fall within the definition of a CASP or not.
- you provide non-custodial crypto services: wallets with full user control of keys, non‑custodial DeFi interfaces, protocols where you do not manage clients’ funds;
- your service is not an organized trading venue where you, as the operator, consolidate orders and are responsible for execution;
- you do not provide personalized investment advice on specific tokens under the MiCA definition;
- all turnover is crypto‑to‑crypto, and fiat off‑ramp avoidance is implemented through third‑party licensed payment gateways.
In practice an unlicensed DeFi protocol or interface can remain in the «regulatory grey zone crypto» if three criteria are met:
- non‑custodial architecture and no access to users’ funds;
- no centralized operator making investment decisions;
- a transparent white paper of the crypto project clearly stating the token status (utility, non‑security) and the risks for users.
At COREDO we regularly conduct compliance audits of such crypto models for clients who want to maximize the flexibility of a non‑licensed crypto project without crossing into CASP.
Fines for crypto without a license: Czech Republic, Lithuania, Malta
Even within the EU regulators treat unlicensed VASPs differently. The most frequent requests to COREDO in 2024–2025 are related to three jurisdictions: Czech Republic, Lithuania, Malta.
| Jurisdiction | Fine for crypto without a license | Additional risks |
|---|---|---|
| Czech Republic | Up to ~€661,000 for unlicensed crypto services, especially in fiat operations and servicing residents | Blocking of local accounts, banks refusing to provide services, difficulties with subsequent business legalization |
| Lithuania | Up to €5 million or 5% of turnover, possibly a double profit penalty for systematic violations | Registration in the crypto operators’ registry, mandatory reporting and enhanced AML supervision |
| Malta | Fines up to €5 million or 5% of turnover, penalties of double profits for certain types of violations (MFSA) | Reputational risks for projects focused on the CIS, increased scrutiny for cross‑border operations |
One practical alternative is participation in a regulatory crypto sandbox where available: the regulator sees the experimental format in advance, and you get a chance to test the business model before full licensing. For a number of European Web3 teams we have built exactly such a trajectory: a fast launch as non‑custodial, then entry into the sandbox and only after validation – an application for Licensing.
EU crypto license vs no license
When a founder comes to me asking “where is it better to obtain an EU crypto license and where is crypto business without a license acceptable”, I always separate these scenarios along two axes: purpose (EU single market access or global presence) and readiness for regulatory burden.
Classic route: Lithuania, Malta, sometimes Cyprus: with a full crypto license, minimal capital, audit of the crypto company and access to European banks. Alternative route: an offshore crypto entity or onshore‑structures with the territorial taxation principle, where crypto registration without a license is permissible if the business does not serve local residents and does not touch fiat.
Asia: crypto license vs no license
Asian hubs remain one of the main requests from COREDO clients. In practice for Web3 projects we most often consider Singapore, Hong Kong, the UAE and a number of other Asian jurisdictions.
- if you touch fiat, accept client funds or manage them – counting on “crypto without a license is legal” will not work;
- for purely technological models (infrastructure DeFi protocols, analytics, blockchain infrastructure) Web3 project registration may be possible without a crypto license, provided the activity is correctly described and AML frameworks are observed.
If this is not done, the client loses:
- access to payment providers;
- the trust of institutional investors;
- the ability to achieve proper cross-border crypto compliance when entering Europe or the CIS markets.
Advantages of a license-free crypto project in Costa Rica
Costa Rica has become one of the most discussed jurisdictions in COREDO’s requests on license-free crypto projects. The reason is simple: the combination of crypto territorial taxation and a relatively relaxed approach to non-licensed crypto businesses oriented toward foreign clients.
Key features we take into account when structuring:
- territorial taxation principle: taxes are levied only on income from sources in the country; global crypto operations, if properly configured, may not be subject to local tax;
- Costa Rica closed registries: corporate registers are less public, which is more convenient for IP asset shielding and protecting ownership structure;
- no audit requirements for small private companies and the possibility of a single shareholder setup without significant minimum capital.
| Advantage | Description |
|---|---|
| Taxes | No taxation of foreign activities if flows are configured correctly |
| Registration | No requirements for substantial share capital, one shareholder and director are sufficient |
| Banking | Access to local accounts that can be used as a supporting infrastructure for banking access for a crypto project (with careful description of the business) |
African crypto jurisdictions with territorial taxation
African emerging crypto zones are still less known to the wider audience, but COREDO already sees steady interest in certain countries with territorial taxation and a flexible approach to unlicensed VASPs. These jurisdictions are of interest when you:
- are targeting global DeFi or Web3 services without directly working with local residents;
- are building scaling non-licensed DeFi and want to test the model before obtaining an EU license;
- are looking for a more tolerant attitude toward regulatory grey-zone crypto, provided there is transparency for banks and investors.
How to launch a crypto project without a license in 2025
When an entrepreneur asks me: «how to launch a crypto project without a crypto license in 2025», I always emphasize: the goal is not to “evade regulation”, but to choose the correct regime with clear rules.
Choosing a jurisdiction
- whether you plan EU clients now or in the foreseeable future;
- how important access to traditional banking is;
- whether you are ready for public disclosure of beneficiaries and reporting.
If you need maximum flexibility and a crypto business without a license, Costa Rica and certain Asian and African jurisdictions come into focus. If the priority is the European market and the brand of a legal player, it makes more sense to plan for an EU crypto license from the start.
Company registration and IP protection
- selects the optimal format of an offshore crypto entity or onshore structure;
- prepares the crypto project’s white paper with a clear description of the revenue model, token status (token utility non-security, where justifiable) and user restrictions;
- sets up IP asset shielding: registering IP in a jurisdiction with strong rights protection, separating IP from the operating company.
AML compliance for a crypto project without a license
- we implement a risk-based KYC model with a KYC threshold exemption for microtransactions;
- we document transaction monitoring procedures, especially for cross-border operations;
- we prepare internal policies and a compliance audit (crypto) as an argument for banks and investors.
Issuance of tokens without a license and without listing
- centralized exchanges carry out their own investor Due Diligence of an unlicensed project;
- without a basic compliance package, a transparent structure and a jurisdictional conclusion on the token’s status, exchange listing of an unlicensed project becomes practically unrealistic.
Scaling and cross-jurisdictional scaling
- assessing turnover thresholds at which the status of a CASP without a license is no longer acceptable and a transition to licensing is required;
- planning entry into the crypto-operators registry where possible as an intermediate step;
- stepwise migration of some functions into a licensed structure while keeping the DeFi core non-custodial.
Risks of a crypto project operating without a license or AML measures
- fines and crypto enforcement actions;
- freezing of bank and exchange accounts;
- attacks on IP and domain assets;
- inability to attract institutional investors.
Fines for crypto services without a license: Czechia, Lithuania
A typical pattern that the COREDO team has seen:
- first, the bank requests additional information about the activity;
- then a sudden freezing of assets occurs during the review;
- in the end: a regulator’s order, a fine and a demand to cease operations.
- we determine in advance whether we need to register as a crypto operator and what the minimum set of procedures required for that is;
- we use legal regimes such as reporting exemption (crypto) and capital adequacy waiver, if the project is small in turnover and does not pose systemic risks;
- we create a structure in which the main financial turnover does not pass through the most aggressive jurisdictions, reducing the likelihood of a “targeted” inspection.
Protection of IP and assets in an unlicensed Web3 project
- protocol code and smart contracts;
- domains and branding;
- user databases.
- registration of trademarks and copyrights in jurisdictions with strong case law;
- separation of IP ownership and operational activity so that local claims against one link do not paralyze the entire ecosystem;
- clear investor protection mechanisms for unlicensed projects: contractual structures, vesting, risk disclosure, even if formally you remain «non‑CASP».
Crypto business without a license: ROI and taxes
The main argument in favor of a “no license” strategy: the ROI of an unlicensed crypto project. But calculations should include not only reduced initial costs, but also the risk-adjusted return of being unlicensed: the probability of fines, losses from blocks, and missed investments.
- initial CAPEX is lower than when obtaining an EU crypto license;
- operational compliance expenses are lower, but not zero;
- the tax burden can be minimized due to territorial taxation and tax risk mitigation;
- On the other hand, access to European and Asian banks and large funds is often limited while the structure remains non-licensed.
- «as is»: profitability without a license, accounting for discounted risks;
- «as will be»: a scenario of gradual transition to licensing (EU or Asia) and accessing a new class of investors.
Key steps to launching a crypto project without a license
- Conduct an initial crypto compliance audit: determine whether the model falls under CASP, VASP, or remains in the non‑custodial zone.
- Choose a jurisdiction with clear rules and territorial taxation (Costa Rica, certain Asian and African hubs) if the goal is a license‑free crypto business with a global focus.
- Implement AML/KYC even without a formal requirement: it’s the foundation of trust for banks, exchanges, and investors.
- Prepare a quality white paper and financial plan taking into account reporting exemption for crypto, if you plan to be listed in registries.
- Plan an exit strategy for the crypto project: at what turnover you will move to crypto licensing in 2025 (EU or Asia), so as not to run into sanctions from MiCA and local regulators.
- For businesses from the CIS: proactively plan CIS business crypto expansion through structures in the EU/Asia/Africa to avoid situations where a fine of up to 5% of turnover and asset freezes put an end to the project.