Cryptocurrencies and Citizenship by Investment: Debunking 4 Myths

One of the most pervasive myths surrounding CBI and cryptocurrencies is that a crypto investor can simply use digital assets to acquire citizenship in a country offering an investor route to citizenship.

While qualifying investment classes under some CBI programmes include real estate, start-ups, investment funds and government bonds, none of them currently allow applicants to qualify through a donation in cryptocurrency.

This is largely due to the regulatory uncertainty surrounding cryptos, a lack of familiarity with crypto-generated wealth and lacking sophistication in methods for tracing and auditing source of wealth in this area to the high due diligence standards demanded by CBI programmes. Moreover, governments are generally conservative when granting citizenship by investment and have so far shied away from allowing crypto investments or donations towards naturalisation by investment.

Practical planning note: Even where wealth is crypto-origin, most reputable routes still expect applicants to convert to fiat and evidence (i) provenance, (ii) conversion events, and (iii) clean onward banking trails.

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Another common misconception is that CBI programmes are a convenient way to launder money using cryptocurrencies. In reality, this is far from the truth.

CBI programmes are often the subject of stringent anti-money laundering and counter-terrorism standards, and the international direction of travel is towards more safeguards, not fewer. FATF and the OECD have specifically examined misuse risks and the controls programmes should implement (including due diligence depth, governance, and information-sharing).

They impose strict due diligence checks and any applicant with a history of financial impropriety or criminal activity will be caught out by the various due diligence systems and ultimately rejected. The CBI due diligence checks extend to the tracing and auditing of any crypto wallets held and to verifications of the source of wealth records of the investor. Our specialist lawyers are able to provide source of wealth and crypto tracing reports.

Reality check (the unglamorous bit): Crypto does not automatically equal “high risk”, but it often equals more work – because you may need to prove things traditional banking would have already packaged neatly for you.

While some countries have been more welcoming to cryptocurrencies than others, there is no evidence to suggest that CBI countries are particularly enthusiastic about digital assets.

In fact, some CBI countries have expressed concerns about the potential for cryptocurrencies to be used for illicit activities such as money laundering and terrorism financing. Moreover, many CBI countries have small, tightly regulated financial sectors and may not have the capacity to deal with the complexities of digital assets.

EU context matters: In Europe in particular, policy and judicial scrutiny has increased. The Court of Justice of the EU has criticised investor citizenship schemes where nationality is granted “in exchange for predetermined payments or investments” as “transactional” and amounting to the “commercialisation” of Union citizenship.

Malta is often cited as comparatively crypto-aware, and applicants with crypto-generated wealth may be accepted where legitimate source of wealth can be demonstrated to the required standard.

Separately, Malta’s framework has evolved, including a merit-based naturalisation route grounded in national law (often referenced as citizenship for exceptional services/merit).
This matters for positioning: it reinforces the idea that decision-makers increasingly focus on integrity, substance, and contribution, rather than simplistic “pay-to-passport” narratives.

Malta Citizenship by Merit (MCBM)

For eligible individuals, Malta’s citizenship by merit framework is a discretionary route based on exceptional services/contributions or exceptional interest, rather than a standardised “investment menu”. For crypto entrepreneurs, this can be relevant where the wider profile includes demonstrable public-interest contributions, strategic activity, or exceptional services – but it does not reduce the burden of evidencing clean source of wealth.

It has been suggested that crypto investors may use CBI programmes to hide their true origin or country of residence, leading to tax evasion.

However, in practice, the banking system is subject to international reporting obligations that refer to the effective country of tax residence of a depositor rather than their nationality. A second citizenship, or even an alternative residency would not disguise the country of birth that is a minimum requirement on international passports.

Proving tax residency to one’s bank requires producing a certificate of tax residency which presumes the ability to prove to the satisfaction of the tax authorities that that person is sufficiently connected with the country through presence, commercial activity, investment holdings, family life, property ownership or other links to that country.

Thus, while cryptocurrencies and CBI programmes may seem like natural bedfellows, the reality is that the two are not as closely connected as some people believe. Investing in CBI programmes with cryptocurrencies is currently only possible if such currencies are first converted to fiat, and then subject to source of wealth audits and wallet tracing to ensure the legitimacy of the funds accumulated through crypto activity.

Our global citizenship lawyers advise private clients, founders, investors and family offices on citizenship and residence planning across multiple jurisdictions, with a focus on building decision-ready, compliance-robust application files.

Where wealth originates from digital assets, we help clients translate complex crypto histories into evidence that programme due diligence teams, banks, and third-party screening providers can actually rely on. This typically includes: (i) mapping the wealth story from first acquisition to present holdings, (ii) aligning wallet, exchange and banking records into a coherent chronology, and (iii) preparing supporting narratives that address the issues decision-makers care about most – lawful provenance, clean counterparties, and auditability.

We also coordinate cross-border input (tax, regulatory and banking) so the immigration strategy is consistent with the wider compliance position – because a strong application is not only about eligibility, it is about credibility.

Our Citizenship Services for Crypto Investors

We specialise in assisting crypto investors with citizenship and residence planning across multiple jurisdictions. Our services include:

• Immigration and citizenship strategy: Identifying best-fit routes and eligibility, including timing, family structuring, and practical risks.
• Application support: Preparing the application file and supporting evidence pack to a high standard, including consistency checks across documents and disclosures.
• Tax and residency alignment: Coordinating advice to ensure immigration status, tax residence claims, and banking expectations are aligned.
• Crypto source of wealth evidence: Supporting lawful source of wealth narratives, including wallet/exchange record analysis, transaction mapping, and AML/sanctions screening where appropriate.

Dr Jean-Philippe Chetcuti

Jean-Philippe Chetcuti is Co-Founder and Managing Partner at CCLEX. He advises ultra-high-net-worth individuals, families and their advisors on global citizenship and residence strategy, international private client tax, and wealth, business and family office structuring, often in files where mobility planning must stand up to enhanced due diligence and cross-border disclosure expectations. Chetcuti is the author of the Dual Citizenship Report and the CCLEX Mobility Assets Spectrum and is credited with coining the Doctrine of Contributive Belonging.

Dr Priscilla Mifsud Parker

Priscilla Mifsud Parker is a Senior Partner at CCLEX and leads the firm’s Families & Wealth and Corporate, Trusts & Fintech practices. Her work focuses on trusts and estate planning, wealth structuring and asset protection, and advising entrepreneurs, international families and institutions on cross-border legal and tax alignment – including matters where digital assets form part of the overall wealth profile. Mifsud Parker was the chairperson of STEP Malta and is a regular contributor to prestigious industry journals including the STEP Journal: STEP Journal: Mifsud Parker on Digital Assets in Family Office Structures.

[question]Can cryptocurrency be used to pay for a citizenship application?[/question]
[answer]In most cases, authorities expect qualifying contributions or investments to be funded through fiat and regulated financial channels. Crypto-origin wealth can still be used if it is converted to fiat and supported by auditable source of wealth evidence.[/answer]

[question]Do citizenship and residence routes accept applicants who made their wealth in crypto?[/question]
[answer]Yes, provided the applicant can evidence lawful source of wealth and source of funds, and satisfy integrity screening. Crypto activity usually increases documentation requirements because provenance and counterparties can be harder to verify.[/answer]

[question]What evidence is typically required to prove crypto source of wealth?[/question]
[answer]Common evidence includes exchange KYC profiles and statements, wallet addresses and histories, transaction logs, tracing from acquisition to present holdings, documentation of key counterparties, and a clear conversion-to-fiat narrative supported by bank movements.[/answer]

[question]Does a second citizenship reduce CRS or FATCA reporting exposure?[/question]
[answer]No. Financial institutions assess reporting based on tax residence and controlling person status, not simply nationality. You may still need to produce tax residence evidence and consistent disclosures across banks, advisors, and authorities.[/answer]

[question]Is Malta’s current citizenship framework “citizenship by investment”?[/question]
[answer]Malta’s post-2025 direction focuses on merit-based naturalisation under the Maltese Citizenship Act and implementing regulations, assessed case-by-case and preceded by legal residence. It should not be framed as a transactional purchase model.[/answer]

[question]Can CCLEX assist with wallet screening and source of wealth reporting?[/question]
[answer]Yes. We support the preparation of source of wealth packs for applicants with digital asset exposure, including structured documentation, wallet screening, and AML/sanctions checks, aligned to the expectations of third-party due diligence and regulated intermediaries.[/answer]