Regulatory Requirements:
New businesses seeking to enter the crypto market often grapple with a myriad of regulatory requirements. These encompass anti-money laundering (AML) and know-your-customer (KYC) mandates, licensing prerequisites, and adherence to tax laws. The lack of consistency in regulations across different jurisdictions poses additional challenges for businesses operating in multiple markets. While navigating these hurdles is demanding, regulatory compliance is imperative for ensuring the long-term viability of the cryptocurrency industry.

Understanding Crypto Can Take Time and Effort:
Operating a company in the crypto space requires a deep understanding of various topics, extending beyond mere enthusiasm or investment knowledge. The steep learning curve encompasses processes, finance, IT infrastructure, and regulatory compliance. This complexity is heightened by the need for expertise in addressing industry threats, including fraud, cyber-attacks, and money laundering.

No Protection of Crypto-Assets Under Current EU Law:
Current EU financial services law provides no protection for crypto investors or entrepreneurs in the event of asset loss. The European Supervisory Authorities (EBA, ESMA, and EIOPA) caution against the risks and speculations associated with cryptocurrencies, emphasizing the potential loss of all invested funds.

Even The Biggest Exchanges Can Collapse:
Notably, even well-established cryptocurrency exchanges face vulnerabilities. Recent examples, such as the collapse of FTX and regulatory actions against Kraken, highlight the unpredictability of the market. Hacks on major exchanges like Mt.Gox, Binance, and KuCoin underscore the potential risks, emphasizing the importance of comprehensive planning for new players.

Crypto Beginners are Vulnerable to Online Traps:
Beginners in the crypto space are susceptible to online traps, including phishing scams and false giveaways. These incidents, coupled with the viral nature of bad publicity in the crypto industry, can lead to severe consequences for companies associated with such incidents.

Extreme Volatility:
Cryptocurrencies exhibit extreme volatility compared to traditional stocks. Recent market fluctuations have left many crypto companies vulnerable to financial challenges. Businesses relying on cryptocurrencies, such as exchanges and payment processors, face potential revenue losses and difficulties meeting financial obligations during sharp value declines.

You Have to Pay High EU Taxes:
Tax obligations add another layer of complexity for crypto businesses in the EU. Tax rates vary significantly across EU countries, with some imposing high capital gains taxes. Estonia, Lithuania, and Bulgaria were once known for their favorable tax regimes, but recent tightening of criteria and regulations leaves Bulgaria as a more stable option for regulated crypto businesses.

Conclusion:
New entrants face numerous barriers in the dynamic crypto market, and even established players remain uncertain about the future. Due diligence is crucial for entrepreneurs, emphasizing the need to navigate regulatory complexities, mitigate risks, and stay informed in this rapidly evolving industry.