In recent months, the cryptocurrency market has sparked significant interest. In December 2024, Bitcoin reached a milestone when its price surpassed $100,000. This event not only surprised investors but also prompted the boards of capital companies to explore new opportunities for allocating capital.

1. Bitcoin – A New Era

Bitcoin has long served as a benchmark in the world of digital currencies. Crossing the $100,000 threshold is more than just a figure—it signals that the crypto market is reaching a new level of maturity and investor interest. For companies, this presents an opportunity for substantial growth in accumulated funds, but it also carries the potential risk of sharp declines. For boards, this introduces exposure to legal liability risks.

2. Capital Protection

The starting point for further considerations is the fundamental duty of board members to act with due diligence and loyalty towards the company, while operating within the bounds of justified economic risk. Under European standards, board members are expected to exercise the care and skill reasonably expected of someone in their position. They are also accountable for any damage caused by actions or omissions that contravene the law or the company’s articles of association, unless they can demonstrate they are not at fault.

A key responsibility of the board is to safeguard the company’s capital and net profits. Amid rising inflation, earned but “idle” profits lose value, potentially exposing the board to liability for damages linked to the decline in capital value corresponding to the inflation rate. This is why companies are increasingly considering alternative capital allocation strategies. Investments in cryptocurrencies, despite their volatility, offer a means of portfolio diversification. However, these financial instruments may expose the board to accusations of exceeding the limits of justified economic risk.

3. Legality of Cryptocurrency Assets

European law does not prohibit companies from acquiring cryptocurrencies. These are fully legal assets within the scope of legal transactions. Any company, regardless of size, may choose to invest by purchasing digital assets. The legality of cryptocurrencies is supported by an increasing number of legal regulations at the European level, including tax frameworks. By recognizing the acquisition of digital assets and the profits derived from their sale, legislators have classified these profits as taxable capital gains.

4. Legality of the Purchasing Platform – Exchange

Until December 31, 2024, the legality of cryptocurrency purchasing platforms was overseen through national registers of virtual currency activities maintained by financial supervisory authorities across Europe. These registers ensured that entities operating in the virtual currency sector complied with applicable laws. Under AML regulations, such activities could only be conducted by entities registered accordingly, with legally operating platforms typically displaying their registration details publicly.

From January 1, 2025, these national registers have been superseded by a unified European register (detailed below). However, until June 30, 2026, national registers remain a valid tool for verifying counterparties during the transitional period. AML regulations thus affirm the legality of acquiring and profiting from cryptocurrency assets.

5. MiCA Regulation and CASP License

As of December 31, 2024, the cryptocurrency market in the European Union is governed by Regulation (EU) 2023/1114 of the European Parliament and Council, commonly known as MiCA (Markets in Crypto-Assets). This regulation aims to standardize the rules for trading crypto-assets, enhancing investor protection and market stability. MiCA covers the issuance, offering, and provision of services related to crypto-assets.

Under MiCA, entities providing crypto-asset services must obtain a Crypto-Asset Service Provider (CASP) license to operate within the EU. This license enables the use of a single European passport, allowing services authorized in one member state to be offered across the entire single market. National financial supervisory authorities, such as those in individual EU countries, oversee the crypto-asset market and issue CASP licenses.

6. Two Parallel Registers Until June 30, 2026

The MiCA Regulation establishes a transitional period, permitting entities listed in national registers to continue operations until June 30, 2026, as stipulated in Article 143(3) of MiCA. Entities applying for a CASP license by May 1, 2026, may extend their activities until September 30, 2026, per Article 143(4). After this period, all entities in the cryptocurrency market must hold a CASP license to operate legally in the EU. National legislators may shorten this transitional period, though no such changes have been implemented to date.

For company boards, this dual framework allows verification of entities through which investments are made. Until June 30, 2026, both national registers and the CASP license register, maintained by the European Securities and Markets Authority (ESMA), should be consulted to ensure the legality of service providers.

7. AML Obligations from the Perspective of a Company Purchasing Cryptocurrency Assets

AML obligations apply to a specific group of obliged institutions, including cryptocurrency exchanges and digital currency platforms. Companies purchasing cryptocurrencies for their own use, rather than as part of regulated activities, are not directly subject to AML requirements. The responsibility for compliance lies with the service providers facilitating transactions, who must implement Know Your Customer (KYC) procedures, monitor transactions, and report suspicious activities to relevant authorities.

Nonetheless, company boards should ensure transaction transparency. Providing accurate identity verification data to exchanges or digital platforms is a requirement under AML regulations, aimed at preventing anonymous transactions that could facilitate money laundering or terrorism financing. While AML rules do not mandate reporting the mere acquisition or possession of cryptocurrencies, profits from their purchase and sale trigger tax obligations that must be declared in line with applicable tax regulations.