Crypto Business Exodus from the EU: Why Companies Are Moving Offshore

Lead: The European Union is steadily tightening crypto regulation—from the bloc‑wide MiCA law to strict anti‑money‑laundering rules. Confronted with these new demands, a number of crypto‑asset companies across the EU began relocating their business to offshore havens—Panama, Saint Vincent & the Grenadines (SVG), Costa Rica and others—during 2024–2025. This article reviews the latest migration wave, gives concrete examples, dissects the key drivers—from regulation and taxes to banking barriers—and explains what attracts crypto entrepreneurs to jurisdictions with looser rules. We also present statistics and expert opinions on the impact this outflow may have on Europe and what advantages businesses seek offshore.

New EU Rules and the Outflow of Crypto Businesses (2024–2025)

In 2024 the European Union finalised its first comprehensive crypto rule‑book—the Markets in Crypto‑Assets (MiCA) regulation. MiCA took effect on 30 December 2024, imposing uniform requirements on all crypto‑asset service providers (CASPs) in the 27‑nation bloc. The regulation covers everything from stablecoin issuance and custody to crypto exchanges and brokers. At the same time, the EU adopted an updated anti‑money‑laundering package (AMLR) that extends strict KYC and transaction‑monitoring obligations to crypto companies. Together these measures have made Europe a far more demanding environment for crypto businesses.

For small and mid‑sized crypto firms the new rules have been a serious test. MiCA requires every company providing crypto‑asset services in the EU to obtain authorisation through a single, standardised process. Licensing is lengthy and costly: after MiCA’s introduction approval timelines stretched to more than six months and legal/compliance costs jumped from roughly €10 000 to €60 000 +. Many start‑ups must therefore choose between costly adaptation, shutting down or moving operations outside the EU. According to TRM Labs, by April 2025 fewer than 20 companies had secured MiCA registration (across seven EU countries), while dozens continued operating without authorisation at the risk of sanctions. Before harmonisation, Europe counted over 3 000 registered crypto‑asset providers, of which roughly 1 100‑1 300 were active. All of them now face a high compliance bar, and many fringe players have begun winding down EU operations or looking for softer jurisdictions.

Statistics confirm the trend. As of March 2025 only 12 crypto exchanges had obtained licences under the new framework. Venture funding for European crypto start‑ups has fallen and industry head‑count has shrunk. The damage stems not only from regulatory pressure but also from banking access: the European Central Bank has taken a sceptical stance toward crypto assets and commercial banks routinely de‑bank crypto firms. Surveys show up to 50 % of fintech and crypto companies in Europe and the UK have faced account refusals, closures or punitive fees. This echoes America’s “Operation Choke Point 2.0,” which sought to squeeze undesirable industries out of the banking system. Taken together, tough regulation, rising compliance costs and banking barriers have made the EU hostile to many crypto start‑ups. A Coincub report notes that while EU rules bring legal clarity, they have unintentionally raised the burden and expenses to levels many young firms can’t bear, leading to a “brain drain” as European entrepreneurs look for friendlier venues.

Concrete Examples: Who’s Moving Offshore

Real‑world cases back the data. Deribit, the Dutch‑born crypto‑derivatives exchange, moved from the Netherlands to Panama in early 2020. On 10 February 2020 Deribit B.V. ceased Dutch operations and transferred business to DRB Panama Inc. The catalyst was the EU’s 5th Anti‑Money‑Laundering Directive, whose strict client‑ID rules Deribit said created “too high barriers” for most traders. In effect, the exchange chose crypto‑friendly Panama over full KYC in Europe—though it simultaneously upgraded compliance tools outside the EU.

A more recent case is Ethena GmbH in Germany. The stablecoin issuer behind USDe faced the first forced MiCA action in 2025: German regulator BaFin found that Ethena’s EU subsidiary breached MiCA by offering unauthorised sUSDe investment tokens and ordered it to cease EU activity. Ethena GmbH was liquidated, and all operations moved to Ethena (BVI) Ltd in the British Virgin Islands. EU holders got a 42‑day redemption window; thereafter all redemptions run through the offshore entity. Ethena thus became a landmark of 2025’s “regulatory migration,” pushed offshore by MiCA.

Less‑public but widespread shifts are also underway. Many start‑ups that once registered in relatively lenient EU states—Estonia, Lithuania, Poland—have surrendered licences or sold assets, re‑incorporating abroad. In 2022 Estonia tightened crypto licensing, stripping hundreds of permits; some firms moved offshore. In 2023‑24 exchanges unwilling to meet new rules blocked EU users or changed legal homes. Bybit left the UK in 2023 over local rules, later securing a MiCA licence in Austria—choosing to stay in the EU but switch countries. Yet many smaller platforms skip EU licensing entirely, operating “only offshore” or incorporating in the Caribbean, Latin America or Asia. Community advice circulates: “Move to LatAm, the UAE or Thailand before EU and US rules turn authoritarian.” Indeed, we see European crypto teams shifting to Dubai, Singapore or classic offshore hubs like Panama, SVG, BVI, Seychelles or Costa Rica, where until recently no dedicated oversight existed.

Why Businesses Leave: Regulation, Taxes, Banks

Regulatory pressure in the EU is the prime driver. While MiCA delivers legal certainty and a single licence attractive to big players such as Coinbase and Kraken, its requirements fall disproportionately on small firms: stringent KYC/AML, secure custody, audits, extensive documentation (white papers detailing mechanisms and risks). MiCA also effectively bans privacy coins and algorithmic stablecoins, limiting product lines. Non‑compliance risks severe measures: regulators may freeze assets, suspend operations and revoke licences. For many start‑ups formerly operating in a grey zone, these demands are organisationally and financially unbearable, prompting them to seek refuge abroad.

Tax optimisation is another motive. EU corporate‑tax rates hover around 20‑30 %, and many states tax crypto trading or mining as income or capital gains. The EU exchanges financial data and combats tax evasion, frustrating those wishing to keep crypto earnings private. Offshore jurisdictions slash the burden—sometimes to zero. Panama taxes only domestic income: foreign‑sourced revenue, including crypto profits, is tax‑free. SVG has long been a pure tax haven: 0 % corporate tax, no capital‑gains or dividend taxes. Costa Rica does not offer zero tax for resident companies but still levies no special crypto taxes, and crypto gains currently escape capital‑gains tax. Offshore thus lets firms keep more margin—vital after the 2022 market crash.

Banking access is a further factor. European banks often refuse or close crypto accounts. Offshore jurisdictions may have smaller banks less bound by Western restrictions, and some (Panama) operate in US dollars, easing settlement. Opening accounts can still be challenging, but many offshores entice crypto business with financial incentives—Panama offers a dedicated “crypto entrepreneur” visa, and Dubai fosters crypto‑friendly banks. Migrating offshore often means switching to alternative financial rails, including stablecoins, bypassing conservative European banking.

Offshore Advantages: Freedom, Speed and Minimal Bureaucracy

Offshore jurisdictions lure crypto firms with far looser, more flexible laws. Frequently no crypto‑specific statutes exist—what isn’t forbidden is allowed. Costa Rica is a prime example: no legislation directly regulates crypto assets, yet their use is legal. The government has adopted a watch‑and‑wait stance: businesses can provide digital‑asset services without a special licence—just register an ordinary company. This “regulatory vacuum” fosters experimentation. Former legislator Jorge Dengo said no crypto law is expected for 2–3 years, with authorities merely “watching closely.”

Saint Vincent & the Grenadines likewise offered full freedom until 2025: no crypto or blockchain laws. Setting up an International Business Company (IBC) required no extra permits and took one to two weeks, with no need for local directors. From 31 May 2025 a Virtual Assets Act now mandates VASP registration, but requirements (≈ US$37 000 capital, local agent, US$1 m insurance, quarterly AML reports) remain far lighter than MiCA, and corporate tax is still zero.

Panama remains highly liberal despite debates over a crypto bill (partially vetoed in 2022). The “Panamanian model” combines minimal state interference, tax incentives and progressive proposals. Parliament approved a crypto‑assets bill in 2022 (not fully enacted), yet business already enjoys the pro‑crypto climate. Panama’s US‑dollar economy supplies stability, and modern infrastructure suits tech firms. The government openly supports innovation with special visas and tax holidays for IT. Hence Panama is branded a “crypto paradise.”

Of course lack of regulation cuts both ways—attracting those who shun bureaucracy but exposing firms and clients to legal uncertainty. Some offshores now add basic rules to balance appeal with responsibility. SVG’s new VASP regime, for instance, aims to appease FATF while preserving core perks—low taxes, privacy and speed.

Below is a concise comparison of conditions in the EU versus key offshore havens (late 2024–early 2025):

Note: Some offshores are updating laws (e.g. SVG’s 2025 VASP regime), but they remain far less stringent than the EU.

Consequences and Outlook

The offshore move saves firms time and money and lets them offer products banned in Europe—but cuts them off from EU markets and raises reputational risks. For the EU, the talent and capital outflow could slow innovation, yet regulators argue a smaller, safer market is preferable after scandals like FTX. Whether Brussels can balance control with competitiveness—by improving banking access and supporting sandboxes—will decide if Europe stays a crypto hub.

Conclusion: The 2024–2025 crypto exodus from the EU highlights a global tug‑of‑war: states seek control, while a borderless industry finds lenient jurisdictions. Panama, Costa Rica, SVG and others exploit the moment, but pressure to impose basic rules is growing. The EU, for its part, bets on rigorous standards. The winners will be those jurisdictions—offshore or onshore—that strike the best balance between innovation and safeguards.