The Crypto Fund Domicile Decision: EU or the UK?
Selecting the optimal domicile for a crypto fund requires careful analysis of the distinct regulatory frameworks in the European Union and United Kingdom. The EU’s comprehensive Markets in Crypto-Assets (MiCA) regulation provides legal clarity across member states, while the UK’s evolving approach emphasizes innovation and flexibility.
EU’s MiCA Regulation: Standardized Framework
The MiCA regulation establishes uniform rules for crypto service providers operating across EU nations. By enabling passporting rights, it allows firms to expand throughout the single market with one authorization. This streamlined process benefits funds targeting institutional investors or pan-European growth.
UK’s Post-Brexit Approach: Balancing Innovation and Protection
Since leaving the EU, the UK has developed its crypto laws through the “Plan for Change” initiative. This framework seeks to integrate digital assets into traditional finance while protecting consumers. The UK’s regulatory sandbox provides space for testing innovative products under supervision.
Key Decision Factors for Fund Managers
- Regulatory Certainty: MiCA offers stability; UK provides adaptability
- Operational Considerations: EU passporting reduces administrative burdens; UK sandbox enables experimentation
- Strategic Alignment: EU suits funds prioritizing compliance; UK attracts cutting-edge projects
Industry Perspective
“The domicile choice ultimately depends on a fund’s operational model and growth strategy,” explains Julie Bourgeois, Head of Legal and Compliance at 6 Monks. “While MiCA creates predictability, the UK’s dynamic environment fosters innovation.”
Future Outlook
Both jurisdictions will significantly influence digital asset development. The EU’s standardized rules and UK’s flexible approach may create complementary ecosystems for different types of crypto funds.
Opinion by: Julie Bourgeois, Head of Legal and Compliance, 6 Monks. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.
