In the ever-evolving world of cryptocurrency, the domicile decision for crypto funds is becoming a hot topic. As of June 2025, fund managers are caught in a tug-of-war between the European Union’s Markets in Crypto-Assets (MiCA) regulation and the United Kingdom’s burgeoning crypto laws. Both jurisdictions offer distinct advantages, yet the choice isn’t as clear-cut as it seems.
EU’s Legal Certainty: A Safe Harbor?
Let’s start with the EU. Its MiCA regulation, finalized not too long ago, brings a degree of predictability that’s hard to ignore. The regulation offers a well-defined framework, providing legal certainty to crypto fund managers. It’s like a lighthouse in the stormy seas of crypto regulation—offering stability and clarity. According to Elisa Marquez, a blockchain consultant based in Berlin, “MiCA is a game-changer. It’s structured, comprehensive, and gives fund managers the confidence to navigate the complexities of the crypto world.” As explored in our recent coverage of Europe’s plans to regulate DeFi in 2026, MiCA’s current framework leaves some sectors, like DeFi, in a state of uncertainty.
Moreover, the EU’s passporting ability is a big draw. It allows funds to operate across member states without the need for multiple licenses. This seamless cross-border functionality is a godsend for managers eyeing expansion in the European market. However, there’s a flipside. Critics argue that MiCA’s stringent rules could stifle innovation, potentially boxing in the creative minds driving the crypto revolution.
The UK’s Flexible Approach: A Playground for Innovation?
On the other side of the Channel, the UK is painting a different picture—one of flexibility and innovation. Since Brexit, the UK has been keen on positioning itself as a global crypto hub. Its regulatory framework is still in the oven, but it’s being crafted to be both permissive and adaptable. “The UK is taking a very entrepreneurial approach,” notes Oliver Drake, a fintech analyst in London. “It’s about fostering an environment where innovation can flourish without being stifled by overly prescriptive rules.” This strategy aligns with the ambitions of companies like OpenTrade, which recently raised $7M to expand stablecoin yield access, as detailed in our report on OpenTrade’s expansion.
The UK’s strategy seems to resonate well with those who value creativity over conformity. The focus is on nurturing homegrown talent and attracting global players looking for a regulatory haven. However, this flexibility comes with its own set of challenges. The lack of a standardized framework could lead to unpredictability, deterring some fund managers who prefer the security of a more structured regulatory environment.
Navigating the Crossroads
So, where do fund managers go from here? The decision isn’t merely a matter of picking between apples and oranges. It’s more like choosing between a well-paved highway and a winding, scenic route. Each path offers its own set of rewards and risks.
For those prioritizing market stability and legal clarity, the EU’s MiCA regulation might seem appealing. It’s a safer bet for funds looking to establish a solid footing in the European market without the fear of regulatory surprises. Yet, for those driven by innovation and the allure of a flexible regulatory environment, the UK presents an enticing opportunity. It’s a landscape ripe for experimentation, where the rules of the game are still being written.
The Road Ahead
As we move through 2025, the tug-of-war between these two regulatory giants will continue to shape the crypto landscape. Fund managers will have to weigh their priorities carefully—balancing the need for stability with the desire for innovation.
Will the EU’s structured approach become the gold standard, or will the UK’s flexible strategy pave the way for the next wave of crypto innovation? Only time will tell. What’s clear is that the decision at this crossroads will have far-reaching implications, not just for fund managers, but for the entire crypto ecosystem.
The jury is still out. But one thing is certain: the choices made today will reverberate through the markets for years to come.
Source
This article is based on: The crypto fund domicile decision: EU or the UK?
Further Reading
Deepen your understanding with these related articles:
- U.K. Regulator Names Sarah Pritchard as Deputy CEO to Help Oversee Crypto, Stablecoins
- South Korea moves to legalize stablecoins with new crypto bill
- RWA token market grows 260% in 2025 as firms embrace regulating crypto
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
