Is the UK a Good Place to Launch a Web3 Startup?
It’s the year of the Web3 startup. In 2024, Venture capital investments in Web3 technologies were estimated between $9.9 billion and $11.5 billion, and so far in 2025, they’re expected to reach approximately $18 billion, nearly doubling from the previous year.
Web3 is certainly here to stay, which begs the question: Is the United Kingdom a favourable place to take a Web3 startup to market?
UK leads Europe in Web3 startup compliance costs
Since December 2024, the EU’s MiCA regulation has made the startup process complex and costly. Crypto and Web3 Startups that handle assets, such as exchanges, custodial wallet providers, and issuers of asset-referenced or e-money tokens, must maintain capital reserves between €50,000 and €150,000. They also need to invest in compliance infrastructure like AML systems and cover licensing and insurance costs. These obligations can lead to first-year compliance expenses ranging from €100,000 to €500,000, making the EU challenging for smaller companies.
In contrast, setting up a crypto startup in the UK can be significantly more affordable. FCA registration fees range from £2,000 for firms with crypto revenue below £250,000 to £10,000 for those above this threshold. While ongoing compliance costs related to AML and KYC systems still apply, they are generally more manageable than the stringent financial requirements under MiCA, allowing UK startups to allocate more capital to growth and development.
The UK’s population leads in crypto adoption
Gemini’s 2024 State of Crypto Report places the UK alongside France as a leader in European crypto adoption, with both countries at 18%. Combined with the UK’s substantial population of 68.35 million, this presents a promising initial market for new startups.
Ranked among the top 20 countries globally for crypto adoption and being the sixth wealthiest nation by GDP, the UK offers a balanced opportunity for consumer engagement and institutional expansion, making it a strategic location for a new Web3 startup.
Access to London, with Europe on its doorstep
London, as the world’s financial capital, offers unmatched networking opportunities with top financial professionals and investors. The city hosts major crypto conferences like the London Blockchain Conference and Zebu Live, making it a hub for innovation and collaboration. London’s location also makes it easy to connect with the rest of Europe. Paris is just a 1 hour 20 minute flight away, Berlin about 1 hour 40 minutes, and Madrid around 2 hours 30 minutes. This proximity means quick access to key European markets, partners, and events, making the UK an ideal base for Web3 entrepreneurs.
Crypto tax & the national Interest
The UK’s capital gains tax (CGT) rates on crypto assets remain competitive within Europe, despite a recent increase . As of 2024, basic-rate taxpayers face an 18% CGT on crypto, while higher-rate taxpayers are taxed at 24%. These rates are still more favorable than many European countries, where top marginal CGT rates can be significantly higher – for example, Denmark at 42%, Norway at 37.8%, and France at 34%.
The UK’s corporation tax rates are competitive in Europe. Smaller companies pay 19% on profits up to £50,000. The main rate of 25% for profits over £250,000 is moderate compared to Germany and France, where rates reach nearly 30%. While not as low as Ireland’s 12.5%, the UK still offers a balanced tax environment.
It’s worth noting that the UK government also holds around 61,000 BTC, placing it among the top three government Bitcoin holders globally. This substantial reserve shows that supporting crypto is in the UK’s national interest. As the US moves towards creating a strategic Bitcoin
reserve , the UK is well-positioned to follow suit, using its existing holdings to maintain leadership in digital assets.
The Honest Truth
Based on our research, the UK is one of the best places to launch a crypto startup, but it may not be the right fit for everyone. Other jurisdictions like Dubai and Switzerland offer lower taxes and lighter compliance requirements, which can be appealing for startups looking to minimize costs. However, these regions don’t provide the same access to a large, established financial economy and population as the UK.
Starting in the EU under MiCA might make sense for well-funded companies that can handle higher compliance costs. But for bootstrapped startups or those with solid angel backing, the UK offers a balanced environment with competitive tax rates and strong market access.
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