It’s already 2025. Where should crypto companies apply for licenses?

After more than ten years of brutal growth, the encryption industry has entered a new era:Without a license, it is difficult to move forward.

From exchanges, wallets, payment companies, to OTC, custody, Staking, and NFT platforms, as long as they involve the collection, transfer, custody, or matching of virtual assets (Virtual Assets), they are basically regulated and included in the “VASP (Virtual Asset Service Provider)” framework.This is not a trend, it is a reality.

In major jurisdictions such as the European Union, Hong Kong, the United Arab Emirates, Singapore, and the Bahamas, regulators are working simultaneously, and the encryption business is moving from a gray area to institutionalization. If it used to be “first to issue coins,” now it is “compliance first.”

What is a VASP license?Why is it increasingly important?

The VASP (Virtual Asset Service Provider) license is essentially a financial business license for encryption companies.It is issued by financial regulatory agencies (central banks, financial regulatory authorities, securities regulatory commissions, etc.) in various countries and is used to manage full-link activities from exchanges, wallets, payments to investment services.

Holding a VASP license means:

• Your business complies with the jurisdiction’s AML (Anti-Money Laundering), KYC (Customer Identification) and CTF (Counter-Terrorism Financing) standards;

• You can legally promote your business, recruit users, and carry out exchange and custody services;

• You can connect with traditional financial systems such as banks, insurance, and payments to gain cooperation and trust.

Companies without a VASP license are not only unable to legally reach local customers, they may also be fined, have their accounts frozen, or even be forced to shut down due to “unlicensed operations.”

In short, the VASP license has become the passport and talisman of encryption companies.

What are the practical benefits of taking a card?

Many entrepreneurs regard VASP as a “cost center” and ignore that it is actually a barrier to competition.Legalization is as much a business issue as it is a compliance issue.

1. Global market access (Passport effect)

Obtaining a license from an EU member state allows you to travel throughout the European market with a “MiCA passport”; holding a license in the United Arab Emirates, Hong Kong or Singapore also means that you can connect with mainstream banks, payment and investment institutions.

2. Brand and trust endorsement

A license plate is the most effective certificate of trust.Banks, insurance, VC, and custody institutions are only willing to cooperate with licensed institutions.Without a license, it is difficult to even open an account.

3. Reduce legal and operational risks

Licensed companies operating within the system can effectively isolate money laundering, fraud and sanctions risks through the KYC/AML mechanism, while improving internal governance levels, transaction security and compliance review capabilities.

Which businesses must hold a VASP license?

Almost all “coin-touching” B-side or C-side businesses may be defined as VASP:

Most jurisdictionsExchanges, custodial wallets, crypto payments, OTC, funds, issuers, payment gatewaysOther entities require a VASP or equivalent license,Whether it is necessary is subject to local law.

Comparison of VASP licenses in major global jurisdictions

(1) No compulsory license or regulatory gray area (low threshold for establishment)

For start-up projects, architectural companies or entities that only involve on-chain technical services, some jurisdictions are still at the stage of “no special VASP law” or “only requiring general anti-money laundering registration”.Such areas have a short establishment cycle and low costs, but they cannot provide complete regulatory endorsement and cannot directly serve the mainstream market.

Costa Rica

There are no specific encryption laws, only companies are required to comply with general AML/CFT obligations.The setup process takes about 1–6 weeks and can be started quickly.

Suitable for setting up technology development companies or international settlement entities.

The disadvantages are: no regulatory license support and difficulty in obtaining a bank account.

Panama

Maintain a “no VASP supervision” status for a long time.Financial regulators (SBP, SMV) have publicly stated that they have no regulatory authority over pure crypto transactions.Company establishment costs are low, there are no minimum capital requirements, and overseas crypto earnings are tax-free under the local tax system.

But it also means a regulatory vacuum: companies need to perform KYC, tax and business compliance on their own.

Suitable for registered holding companies, cross-border settlement SPV, and DAO foundation holding layers.

Belize

There is no independent VASP framework, and AML supervision is currently only implemented for “financial institutions”.The registration period is about 3–5 weeks, low cost, and tax neutral.

However, the banking system is not friendly to the crypto industry and it is difficult to open an account.

Suitable for on-chain service projects with no currency and no currency settlement.

Georgia

Cryptocurrency is legally recognized as an “asset”, but there is no dedicated VASP licensing system.

The company can be registered as an ordinary commercial entity and only needs to perform general AML/KYC.

The local electricity price is low and the digital infrastructure is excellent. It is a common location for mining, computing power, and node service companies.

Marshall Islands

We are open to DAO and blockchain companies, and there is no special VASP license.The government recognizes the form of “DAO legal person (DAO LLC)” and can register companies on the chain.

Suitable for DAO governance layer, on-chain organization registration or token issuance SPV.

However, it is still necessary to establish its own AML policy to prevent cross-border cooperation from being blocked.

(2) Moderate supervision (clear but flexible)

El Salvador

The first country in the world to list Bitcoin as a legal tender.There are two types of licenses:

• BSP (Bitcoin Service Provider):For BTC business;

• DASP (Digital Asset Service Provider):For other tokens.

Currently, Chivo Wallet, Strike, etc. are licensed.

Cayman Islands

There is a special “VASP Act” that requires the submission of business plans, AML policies, audits and management background checks.The process is rigorous but efficient, the cost is low, the tax system is neutral, and it is suitable for international projects (BitMart is registered here).

British Virgin Islands (BVI)

The supervisory authority is FSC and follows the VASP Act.Supervision focuses on AML/KYC consistency.The project Portofino Technologies was approved last year.

Advantages: Clear supervision, good reputation, easy for subsequent expansion.

Seychelles (Seychelles)

The VASP law covers exchanges, wallets, brokerages, and ICO/NFT registrations.

The tax preferential policies are obvious, but the initial cost is relatively high, so it is suitable for projects with sufficient funds and for institutions.

Bahamas (Bahamas)

Regulated by SCB and licensed under the DARE Act.Requires physical office, capital, and AML system.

However, its tax neutrality and strong infrastructure have attracted Tether, Bitfinex, OKX, etc. to launch.

(3) High supervision (EU system)

If Cayman and BVI represent “flexible compliance”, then the EUThe clearest rules and the highest thresholdregulatory system.Any business that plans to operate within the EU or provide encryption services to EU users must comply with the MiCA (Markets in Crypto-Assets, EU Crypto-Assets Regulation) that is about to take full effect.

The core logic of MiCA is:

“All virtual asset service providers (VASPs) are subject to unified supervision and can operate across Europe with a single license.”

This means that as long as you obtain a VASP license in any member country, you can“EU Passport Right”Covering the entire EU market.This is the case in the global crypto regulatory systemThe only licensing mechanism with cross-border effectiveness.

Supervision characteristics

• Unified regulatory standards:MiCA integrates the encryption supervision of each member country, covering all business forms such as issuance, trading, custody, exchange, payment, investment advisory, etc.;

• Mandatory AML/KYC requirements:All VASPs must implement the identification, risk control and reporting obligations under the EU’s Anti-Money Laundering Directive (AMLD5/6);

• “Travel Rule” system:Require the identities of both parties to the transaction to be traceable;

• Advantages of passport system:With a license from one country, you can operate compliantly in 27 member countries, greatly improving the efficiency of market access.

The EU VASP license does have higher application costs and compliance burdens – but it provides the most valuable right of passage in the world.For teams that want to serve European customers, or seek long-term brand and institutional-level cooperation, the MiCA framework is an idealA regulatory-focused route worth investing in.

Three major considerations when taking cards

Choosing which jurisdiction to apply for a VASP license is by no means “whichever is cheaper”, but a matter ofMarket access, regulatory acceptance and long-term sustainabilitycomprehensive decision-making.Empirically, it can be judged from three dimensions:

(1) Market dimension: Where your customers are, there will be supervision

Not all VASP licenses in different jurisdictions can be used freely across borders.

You must specify:Who are your target users, which region is your main customer base, and whether your business involves fiat currency deposits and withdrawals.

• If your customers are mainly inEU or UK, you need to select a member country under the MiCA framework;

• If facingAsian users, it is easier to land in Hong Kong, Singapore or the United Arab Emirates;

• If you wish to createInternational holding or clearing center, BVI, Cayman, and Bahamas have tax and structural advantages.

The actual “jurisdiction” of regulation is oftenCustomer originRather than where the company is registered – this means that you cannot circumvent the regulation of major markets by registering in a relaxed region.

Practical suggestions:First draw your capital and user flow map, and then decide where the license will be issued.

(2) Regulatory dimension: Clear rules are more valuable than “loose” rules

Although the establishment of low-threshold areas is fast, it is often due toSupervision is vagueHowever, it was rejected by banks and partners at a later stage.In contrast, a person who hasA jurisdiction with a stable regulatory framework and transparent approval standards can actually enhance brand reputation and subsequent expansion efficiency.

Focus on three issues:

1. Regulatory maturity:Is there a special VASP act (such as Cayman VASP Act, BVI VASP Act, EU MiCA)?

2. Compliance supporting requirements:Are AML policies, compliance officers, local personnel, physical offices, etc. required?

3. Continued regulatory intensity:After the license is approved, do I need to submit regular audits, update KYC reports, and maintain minimum capital?

Clear supervision ≠ strict.

It means that you can operate stably under clear rules of the game, rather than passively adjusting with policy fluctuations.

Practical suggestions:Prioritize areas with high regulatory transparency rather than the least regulated areas.

(3) Financial dimension: cost ≠ application fee, but long-term compliance account

Many teams mistakenly believe that the cost of obtaining a license only includes application and attorney fees.Actually,The real cost is ongoing compliance and local maintenance.

Key cost elements include:

• Initial setup fee: Registration fees, lawyer fees, compliance consultant fees;

• ongoing compliance costs: Annual audit, AML reporting, compliance officer compensation, local leasing;

• tax environment: Is it taxable?neutrality, whether there is withholding tax, and whether double taxation can be avoided;

• Bank package: Can you easily open an operating account and access the legal currency channel?

Although some jurisdictions have low initial costs, their operations are hindered in the later period due to “the inability to obtain bank support”; conversely, although jurisdictions with mature supervision have high costs, they can obtainFinancial cooperation and capital trust.

Practical suggestions:Look at the total cost from the four stages of “license acquisition – operation – financing – exit”, rather than just looking at the moment when you get the license.

Summary:

Choosing a license plate is not about looking for the cheapest one, butThe most suitable ecology.

Ideal jurisdiction = clear regulations × controllable costs × ability to connect to target markets × banks willing to cooperate.

A VASP license is not only an “access permit”, but also the underlying configuration that determines whether you can go steadily and far in the future.

VASP is not just a license, but a moat

In the past, crypto companies obtained licenses in order to “survive”; but after 2025, licensed companies will obtainKey to the financial system.

The VASP license is not just a regulatory requirement, it is becoming a new international financial language – banks, payment institutions, funds, and family offices all use it to judge whether you are “worthy of cooperation.”

The future encryption world will not be a golden age of wild running without a license;A new era of compliant operations, cross-border mutual trust, and system convergence.

Those projects that complete the license layout, streamline the structure and compliance system in advance will receive real competitive dividends in the next wave of policies.

Compliance is not a burden, it is a barrier.

Whoever builds the moat first will define the future market order.