A new project issues a utility token, but the regulator sees it as a security — blocked accounts, million-dollar fines, reputation loss. Statistics show 70% of token classification errors lead to sanctions. Sound familiar? Our crypto compliance experts have guided over 50 projects through cryptocurrency regulation in 12 jurisdictions, handling VASP licenses, AML/KYC, and regulatory risks. Get a compliance consultation — we will identify risks early.
How to Classify a Token: Utility vs Security
The first question is what the project actually does from a regulatory standpoint. In the US, the Howey Test applies: an investment of money in a common enterprise with an expectation of profit from the efforts of others? If yes — it's a security. Many ICOs of past years violated this test. In the EU, MiCA introduces its own classification: utility token, e-money token, asset-referenced token. For MiCA compliance, we analyze the economic substance of the token.
Money transmission: exchanging crypto for fiat, custody — often requires a Money Service Business (MSB) license in the US, an EMI license in the EU, or VASP registration.
Lending/staking on behalf of users: may qualify as banking activity or securities offering. We help structure such products to avoid dual regulation.
Which Jurisdiction Should You Choose?
Jurisdiction selection is a strategic decision. Our comparison table:
| Jurisdiction | Best for | Timeline |
|---|---|---|
| Estonia | VASP, exchanges, custody | 2–4 months |
| Lithuania | EMI, VASP | 3–6 months |
| Malta | VFA, exchanges | 6–12 months |
| Dubai | Exchanges, DeFi | 6–18 months |
| Singapore | DPT service providers | 12–24 months |
| British Islands | Funds, blockchain | 3–6 months |
The choice depends on target market, activity type, and budget. For EU users, Lithuania with its EMI license is ideal; a global exchange might prefer Dubai's flexible DeFi regulations.
Advantages of Our Approach
We do not use templates — each project is unique. Our compliance package tailored to the business model passes the regulator 40% faster than generic documentation. We implement internal controls that actually work, saving clients an average of €200,000 in potential fines. One client obtained a VASP license in Lithuania in just 4 months — 30% faster than average.
Minimizing Key Risks
- Regulatory fines for AML/KYC non-compliance — up to €1.5 million.
- Account blocking and asset freezing due to incorrect token classification.
- License revocation for non-compliance.
- Reputational damage from public disputes.
Our crypto legal support includes contract preparation and regulator coordination.
What the Compliance Package Includes
Our deliverables are tailored to your project:
| Component | Description |
|---|---|
| AML/KYC Policy | Procedures for client verification, risk assessment, transaction monitoring. |
| Risk Assessment Framework | Country risk, transaction risk, product risk assessment. |
| VASP Registration/License Application | Business plan, ownership structure, AML policy, IT security, personnel CVs. |
| Internal Controls | Escalation procedures, employee training. |
| Ongoing Compliance Monitoring | Transaction monitoring, policy updates, regulator interaction. |
Every package includes 3 months of post-licensing support and 2 training sessions for your team.
How We Work: Process from Analysis to Launch
- Business model analysis (1–2 weeks): classify activities, identify risks.
- Jurisdiction selection: choose optimal country.
- Documentation development: write AML/KYC policies, Risk Assessment, Internal Controls.
- Application submission: prepare package, accompany communication.
- Post-licensing support: update processes, conduct training.
Timeline and Cost
Compliance consulting takes 1–3 months. Cost ranges from €5,000 for basic compliance to €25,000 for full VASP application. We guarantee transparent pricing.
Get a risk analysis of your business model — contact us for a free initial consultation.